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Drop in Initial Claims Points to Strong US Economy in September
09/18/2014 3:51 pm EST
The initial claims number for the week ended September 13 is the lowest level since July, and MoneyShow's Jim Jubak thinks that correlates well with the monthly employment survey and both suggest that the September jobs number could reverse the August drop.
US stock markets decided that a drop in initial claims for unemployment for the week ended September 13 argues that the weak jobs growth in August was a statistical blip and that job numbers for September will show that the US economy continues to pick up steam.
For the week ended September 13, initial claims dropped to 280,000 from 316,000 in the previous week. The consensus among economists surveyed by Briefing.com called for a drop to 305,000. The four-week average for initial claims-which smoothes out some of the volatility in the weekly numbers-fell by 4,750 to 299,500.
The initial claims number for the week ended September 13 is the lowest level since July. The number also correlates well with the monthly employment survey, since it represents the period when the monthly jobs surveyed is conducted.
All that suggests that the September jobs number could reverse the August drop (and that an upward revision of the August numbers is likely, especially since the August survey is usually revised upward in the following month).
The September jobs number is scheduled to be reported on October 3. That will end a big week for economic news that gets kicked off on September 29 with reports on personal income and personal spending.
If all those numbers come in strong, it will mean that the third quarter earnings season-which officially will start with Alcoa's (AA) report on Wednesday, October 8-will begin with a lot of upward momentum.
That's important for a market where both the Dow Industrials and the Standard & Poor's 500 are trading near all-time highs and showing an inclination to move higher.
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