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Thursday, July 12, 2012

Unemployment Benefits -- Unexpected Drop -- Analysts

Remember: the magic number is 400,000

First time applications dropped 26,000; seasonally adjusted, 350,000.

Lowest in four years; lowest since March, 2008.
A Labor Department official noted that part of the drop might be due to some auto manufacturers breaking with tradition and keeping their plants open during the first week of July to meet demand.

Many auto plans normally close during that week to retool for new models.

"It seems like the Labor Department is pretty adamant that this is more of a wonky seasonals adjustment than something we need to put too much stock in," said Michael Hanson, U.S. economist at Bank of America-Merill Lynch. "The underlying trend in claims is probably still in the 370,000 range."

The four-week moving average for new claims, a better measure of labor market trends, fell 9,750 to 376,500. That is still a significant drop, although the average is only at its lowest since May.
A little bit for everyone.

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