Thursday, 1 November 2007

Jobless Claims yet to sound alarm bells

From the US Department of Labor:


In the week ending Oct. 27, the advance figure for seasonally adjusted initial claims was 327,000, a decrease of 6,000 from the previous week's revised figure of 333,000. The 4-week moving average was 327,000, an increase of 1,750 from the previous week's revised average of 325,250.

This one of the indicators to watch to see if the US labor market is deteriorating. As you can see jobless claims remain relatively subdued. The 4 week average would have to push through the 340,000- 350,000 level to raise any real concerns.

The consensus view seems to be that after yesterday's 25 basis point rate cut that the Fed is done cutting interest rates for a while. However if jobless claims begin to rise, non farm payroll growth deteriorates further along with a slowing in the consumer spending the Fed may not be done just yet.