Impact from Hurricane Sandy is extreme for weekly jobless claims which have become impossible to read as a gauge for underlying employment. Initial claims fell back 41,000 in the November 17 week to 410,000 with the prior week revised yet higher to 451,000. Market News International reports that the Labor Department has no handle on the magnitude or the duration of the storm effect. The Labor Department is warning that there may be excess claims due to the storm.
Continuing claims are also showing heavy swings, down 30,000 in data for the November 10 week to 3.337 million following a 193,000 surge in the prior week. Despite the latest decline, the four-week average is up 19,000 to 3.285 million. Also up is the unemployment rate for insured workers which, for a second week, is at 2.6 percent following a prior run at 2.5 percent.
The four-week average for intial claims is now near 400,000, at 396,250 and more than 20,000 over the month-ago trend. But this does not offer any reliable gauge for the monthly employment report. The breakdown of jobless claims will add special emphasis to secondary indicators on the jobs market including ADP's estimate which will be posted the week after next.
Market Consensus before announcement
Initial jobless claims surged an incredible 78,000 for the November 10 week to 439,000. Hurricane Sandy likely had impact. Adding to the pressure was a 6,000 upward revision to the prior week to 361,000. Hurricane Sandy effects add to uncertainty.