Weekly Jobless Claims Headed the Wrong Direction, Compared to Bernanke Fears

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The U.S. Labor Department is showing that weekly jobless claims are headed in the wrong direction. Just a day after Fed Chairman Ben Bernanke was interpreted as cutting off the bond buying in quantitative easing, now the markets get to digest a poor jobs number that does not help in getting unemployment back under 7%, or even down to 6.5%, any time soon.

Weekly jobless claims rose by 18,000 to 354,000 in the past week. Dow Jones was looking for 340,000 and Bloomberg’s consensus from its pool of economists also was 340,000. Another negative was that the prior week’s initial jobless claims reading of 334,000 was revised slightly higher to 336,000.

The four-week average rose by 2,500 to 348,250. We also track the continuing jobless claims, which we consider as the army of the unemployed. It has a one-week lag, but the report showed a whopping 40,000 less down to 2,951,000 in continuing claims.

Today’s report does not offer much in the way of a great reason for investors to buy stocks. The markets have been soft after weak Chinese economic data and on the heels of Bernanke’s comments after the FOMC meeting on Wednesday. Now DJIA futures are down 88 points and under the 15,000 level, while S&P 500 futures are down about 12 points at 1,611.