Instant view: Jobless claims drop to near 4-year low

Reuters News
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Posted: Feb 16, 2012 8:44 AM
Instant view: Jobless claims drop to near 4-year low

NEW YORK (Reuters) - New claims for unemployment benefits unexpectedly fell last week to a near four-year low, a government report showed on Thursday, suggesting the labor market was finally strengthening.

U.S. housing starts rose more than expected in January as groundbreaking on rental property surged, boosting hopes the still-weak housing sector could help economic growth this year.

COMMENTS:

JACOB OUBINA, SENIOR U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK

JOBLESS CLAIMS: "There was nothing unusual in the jobless claims data as per the Department of Labor. It looks like we're actually shifting to a lower level than we even thought. It looks like 350,000 is the level, at least in the short term. But we have to keep in mind that the pipeline of layoffs could pose some problems down the road.

PPI: "I would just take the core jump of four tenths with a grain of salt given the prescription drugs component. That tends to jump at this time of year.

"In terms of PPI, people were braced for a much firmer headline print here but the decline in housing prices and utilities took some of the bite out of it."

DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS

"Initial claims for the week to February 11 defied market expectations for an upward correction in an improving trend, falling by 13k to 348k, their lowest level since March 8 2008. For the series to produce a third straight decline is unusual and suggests the improvement in the labor market is maintaining and even extending momentum as we enter February, for which next week will see the non-farm payroll surveyed. Giving further support to the positive message is a 100k decline in continuing claims in the week to February 4, to 3.426 mln, this the lowest level since August 23 2008."

(Americas Economics and Markets Desk)