The US Initial Jobless Claims rose to the highest levels in 5 months, according to data released this afternoon by the US Department of Labor. The number of applications for unemployment benefits in the US rose by 14,000 over the estimated figure to 225,000.
The reason for the unexpected jump in the US Initial Jobless Claims has however been blamed not on pronounced layoffs, but rather on seasonal employment patterns. Gyrations in seasonal employment are seen mostly before the holiday shopping season that kicks off soon after Thanksgiving.
In-depth analysis of the data release shows that the number of people who are currently on unemployment benefits (Continuing Jobless Claims) has fallen to 1.68milion; the lowest levels seen since the 1970s. There was also great differential between states, with states like Texas, New York, New Jersey and California reporting sharp increases in new jobless claim applications.
The US is currently enjoying some of the best labour conditions not seen in half a century. The economy may have slowed, but companies are not laying off workers in large numbers. Therefore, the US Initial Jobless Claims spike this month is not reflective of underlying labour market weakness.
The US markets are expected to open lower, and the price action on the intraday charts of the Dow Jones Industrial Average reveals that price is more or less trading in a descending triangle. Immediate support can be found at the 27726.83 mark (central pivot). A breakdown of this price support targets 27644.67. Further break of this area also breaks the ascending trendline that connects this week’s price lows. This opens the door to the November 11 lows of 27545.15.
On the flip side, further upside recovery from present levels targets the all-time highs already seen earlier today on the Dow Jones Futures.More content