New claims for unemployment benefits fell more than expected last week, dropping below the key 400,000 level for the first time since early April, according to a government report on Thursday that pointed to some labor market improvement.
LINDSEY PIEGZA, ECONOMIST, FTN FINANCIAL, NEW YORK
What we can say is, it's slow steps in the right direction. It suggests a modest improvement in the labor market in July. It's likely that the market will maintain modest expectations for payrolls next week. I don't think we will see a terribly large bounce because jobless claims do remain elevated although slightly below the June level.
TODD SCHOENBERGER, MANAGING DIRECTOR AT LANDCOLT TRADING IN WILMINGTON, DELAWARE
If history is any gauge, the break below 400,000 will be short-lived. Next week's revision will likely push us above this level, thus maintaining the current unenviable streak of consecutive weeks above 400,000. Traders realize, though, the timebomb for the markets is actually next Friday when the July nonfarm payrolls report is released. Buyer beware--proceed with caution.
MICHAEL FEROLI, CHIEF U.S. ECONOMIST, JP MORGAN NEW YORK
It's an encouraging move in the right direction. It's still pretty elevated, but it's nice to see it below 400,000. We can't say anything definitive, but it makes us marginally less concerned that we are slipping into a recession.
PATRICK O'KEEFE, DIRECTOR OF ECONOMIC RESEARCH AT J.H. COHN IN NEW YORK
Let's not get hung up on the 400,000 level, that's an artificial threshold that gets bandied about but doesn't have a lot of statistical significance. What we see is a long anticipated drop. We've been surprised on the upside the past several weeks, but this drop does signal that in the most recent couple of weeks, employers are not laying off large numbers of individuals. What we're seeing is that the claims levels are returning to their more normal level, which is in a positive direction.
SEAN INCREMONA, ECONOMIST, 4CAST LTD, NEW YORK
It's a big surprise, it dropped below 400,000 for the first time in a while.
It does start to show that there is maybe some downside progress here in the trend, and it could be pretty encouraging for out recovery prospects, but we're not convinced by this one number just yet.
TOM PORCELLI, U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK
I don't even know if anyone really cares about jobless claims today. Everyone is so focused on the deficit debate. Any of the positive this may impart into the market is going to be overshadowed by what's happening in D.C. today.
It's good to see the improvement but it won't have any implications for us for our payrolls forecast.
VIMOMBI NSHOM, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS
It appears that the downward adjustment from an industry trend, holiday rebound, and unforeseen political event that had spiked benefit seeking activity in the first half of the month (such as auto retooling, the July 4th holiday, and the Minnesota government shutdown, which has stopped reporting layoffs specifically related to the temp closure) was greater than expected (seasonals 83k drop vs actual drop of 103k). The seasonally adjusted decline of 24k comes after nearly three months of discouraging levels that had a slight tendency to post weekly gains more so than declines. As a high frequency indicator, it is important to remember the volatility that show in weekly readings (up 47k one week then down 40k the next) and additional reports could validate today's number, or reduce it to noise.