Release Explanation: This report provides the number of people claiming new unemployment benefits and the number of people who are continuing to claim unemployment benefits. Both metrics are provided in weekly and in 4-week moving average form. Very important that economic forecasts are based on the labor market. Economic strength builds from the willingness/confidence of firms to hire, without a strong labor market growth is hard to achieve. Over time the Employment Data will affect all economic releases, it does however take time for labor trends to form. A currency will strengthen or weaken in-line with the other releases that the Employment Data impacts, rather than as a knee-jerk reaction to these numbers printing. Economists tend to look more at the 4-week numbers because weekly numbers can be volatile although the market reacts to the headline numbers initially.

Trade Desk Thoughts: New claims for jobless benefits jumped by 36,000 to 667,000 while the number of workers continuing to claim benefits topped 5 million for the first time on record, the labor Department said today in Washington.

The increasing numbers for continuing claims indicates there's a virtual hiring freeze, said Matthew Carniol, chief currency strategist at With the Fed expecting that employment will remain weak through 2011, expect to see consumption do likewise.

The four-week average for new claims, which economists prefer to use because it smoothes volatility in the data, jumped another 19,000 to 639,000, the highest since October 1982.

The U.S. has lost 3.6 million jobs since the recession started in December 2007, with about half of those losses coming in the last three months alone including the largest monthly drop in over 30 years last month. The unemployment rate currently stands at a 16-year high of 7.6% but when taking into account those working part-time because full-time work isn't available along with workers who have given up on looking for employment, the rate is 13.9%.

Continuing claims soared 114,000 to 5,112,000, the highest level since the government started keeping track in 1967. Continuing claims are up more than two million in the past year. The 4-week moving average of continuing claims was 4,932,250, an increase of 89,250 from the previous week.

The insured unemployment rate increased 0.1 percentage point to 3.8%, the highest since July 1983.

Forex Technical Reaction: S&P futures were trading near their high of the session, up 11.5 points. The dollar has been somewhat weaker vs. the higher-yielders and stronger against the yen (what else is new). Prices were little-changed after the report was released.