The Labor Department presented us with first-time jobless claims data this morning, and the data wasn't necessarily what the market wanted or needed to hear. During the past week, the number of workers filing for state unemployment benefits increased by 20,000 to a seasonally adjusted 339,000. This level of claims is the highest seen in a month. The jump higher far outpaced the expected rise to 325,000 claims. A Labor Department spokesperson noted that there were no special factors impacting the claims, but did hint that knock-on effects of the Hollywood writers strike may have affected claims.
So, why are jobless claims important? A sharp increase in the data is among the leading indicators of an economic slowdown. This data also comes on the heels of Fed Chief Ben Bernanke telling Congress last week that he expects growth to slow noticeably in the fourth quarter and remain sluggish in the first few months of 2008. Bernanke noted that clear signs of this slowdown have yet to emerge in government data. Is this morning's data the beginning of that emergence? It appears that investors may feel so, as the Dow Jones Industrial Average (DJIA) is roughly 30 points lower in the opening moments of trading.