Jobless claims drop by 24,000
Amid the dust being scuffed into the air by Republicans and Democrats arguing over the debt ceiling, the jobless claims report may be a breath of fresh air. The claims dropped to lower than expected levels last week, giving the stocks a modest boost and a hopeful sign for the recovery.
Economists had originally predicted that the claims would decline to 415,000, but the total rested at 398,000. It is significant that the numbers have dropped to below 400,000. "The drop below the 400,000 level that is normally associated with stable job growth will be welcome news for the economy after a recent string of weak data," The New York Times reports.
"If the four-week moving average moves below 400,000, that would confirm we're making definitive progress. Right now the best conclusion is this suggests the progress is tentative," economist Anthony Chan told Reuters. "I would not jump on the bandwagon suggesting labor market problems are completely healed because there are severe seasonal adjustment problems"
Still, it's hard to ignore that there are still more than 7.6 million people claiming unemployment benefits. After the disheartening jobs data from May and June, it will be interesting to see what July's report will yield.
Stocks have already been fickle because of investor anxieties about the debt crisis, but there was a slight surge after the findings on the jobless claims. There were still substantial losses, too, as Exxon Mobil reported a less-than-expected growth in profits, according to Business Week. This all comes at a time where many are fretting that the U.S. will lose its AAA credit rating if an agreement on the budget isn't reached by August 2.