Trade Desk Thoughts - Unemployment Claims

Unemployment Claims (Weekly) Actual 444k, Expected 422k, Previous 429k (Revised from 425k)

Release Explanation: The number of workers filing new claims for unemployment benefits. 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. 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. This report also provides the number of weekly continuing claims as well as 4 week moving averages of new and continuing claims, which most economists prefer to use.

Trade Desk Thoughts: In the week ending Aug. 30, the advance figure for seasonally adjusted initial claims was 444,000, an increase of 15,000 from the previous week's revised figure of 429,000. The 4-week moving average was 438,000, a decrease of 3,250 from the previous week's revised average of 441,250. The unemployment rate remained unchanged at 2.6%.

The number of people who continue to receive benefits was 3,435,000, an increase of 6,000 from the preceding week's revised level of 3,429,000. The 4-week moving average was 3,400,250, an increase of 33,250 from the preceding week's revised average of 3,367,000. The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 3.006 million.

"The report continues to signal the job market is worsening," said Matthew Carniol, chief currency strategist at TheLFB-forx.com. "New claims for unemployment benefits increased for the fourth straight week and the 4 week average of continuing claims is the highest since November 2003."

Forex Technical Reaction: S&P futures fell to session lows after the report's release, and are presently down 8 points (0.63%). The dollar declined slightly against the Yen and the pound, but is gaining on the euro.

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