An unexpected jump in last week's initial jobless claims might threaten the spurting market recovery in the US. Labor Department announced on Thursday first time jobless claims rose by 11 thousand despite falling for the past 2 weeks. Reaching 531 thousand for the week ended October 17.
Numbers are far from satisfactory and caused noticeable panic in the stock market. Major US stock indexes had been lagging for the past week already, and this report added some more sour. Although this might not trigger any significant correction in the stock market, it still suggests the job market is lagging far behind the ongoing economic recovery.
The report still doesn't necessarily mean the job market is getting too bad. We don't see numbers for how many people got employed during the same period so it's difficult to determine the circulation of labor force.
In general, the average of initial jobless claims has declined significantly from the beginning of the year and thus this increase in pace might be only a random fluctuation. The problem was that it has come behind expectations, but economists have confirmed this time of year usually carries noticeable noise in employment data.
As a reaction to the unemployment data US stock market crumbled early in the day, but managed to shake some losses amid the trading session. Three hours into trading the Dow Jones Industrial had added 54.56 points rising to 10,003.92; the S&P 500 was nearly flat with 0.96 increase at 1,082.41, and the Nasdaq Composite remained down by 6.34 points at 2,144.33.
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