Claims bounce
Initial unemployment claims rose 4,000 to 371,000 in the last period, exceeding most estimates which were in the 365,00 area. Today's data finds elevated interest because it covers the payroll survey week, and many analysts will use the number to determine their payroll forecast. The reading is subject to revision, but compares to 388,000 during the July payroll survey week. The 4-week average rose 4,000 to 368,000 and compares to 376,000 during the July payroll survey week.
Seasonal factors are helping to lift the number. The non-seasonally adjusted number fell 7,320 to 310,121. Seasonal factors adjust for seasonal dynamics, but the factor will tend to support claims in the coming weeks. The factor was 0.834 and among the lowest of the year (remember, the unadjusted claims number is divided by the seasonal factor to calculate the seasonally adjusted number).
The S&P 500 has tended to trade well when claims are low and struggle when claims are high, but the relationship is loose. The graphic displays the relationship between unemployment claims and the S&P 500. Claims are inverted to display the idea that low claims tend to correspond to high stocks.
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Seasonal factors are helping to lift the number. The non-seasonally adjusted number fell 7,320 to 310,121. Seasonal factors adjust for seasonal dynamics, but the factor will tend to support claims in the coming weeks. The factor was 0.834 and among the lowest of the year (remember, the unadjusted claims number is divided by the seasonal factor to calculate the seasonally adjusted number).
The S&P 500 has tended to trade well when claims are low and struggle when claims are high, but the relationship is loose. The graphic displays the relationship between unemployment claims and the S&P 500. Claims are inverted to display the idea that low claims tend to correspond to high stocks.
View All Market Commentary
*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
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