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'No Obvious End In Sight': Experts React To Another 1 Million Weekly Jobless Claims

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'No Obvious End In Sight': Experts React To Another 1 Million Weekly Jobless Claims

For the 22nd time in the past 23 weeks, the Labor Department reported more than 1 million new weekly U.S. jobless claims on Thursday morning.

The Numbers: The Labor Department reported just over 1 million initial jobless claims for the week ending Aug. 22, down from 1.104 million claims reported in the previous week. This week’s number came in mostly in-line with consensus economist expectations. In addition, the Labor Department reported 14.535 million continuing jobless claims for the week ending Aug. 15, down 223,000 from the previous week.

Experts React: Mark Hamrick, senior economic analyst for Bankrate, said the jobless numbers continue to be “shockingly high” despite a stock market at record highs.

“Not only are jobless claims still elevated at levels unseen before the pandemic, this has persisted for 23 consecutive weeks with no obvious end in sight. This is in contrast to the ‘everything is fine’ theme of this week’s Republican National Convention," Hamrick said.

Jamie Cox, Managing Partner for Harris Financial Group, said declines in continuing claims are encouraging, but the labor market is still clearly stressed.

“The jury is still out on how the expiration of the [Pandemic Unemployment Assistance] will impact numbers in the next few series. If Congress fails to reauthorize PUA, the impacts to other parts of the economy could very well dent this very unsteady recovery,” Cox said.

Charlie Ripley, Senior Investment Strategist for Allianz Investment Management, said any improvement is a positive development, but the slow pace of improvement is likely something that Federal Reserve chair Jerome Powell is watching closely.

“Many market participants believe the Fed has done what it can to support the recovery and the drumbeat for additional support on the fiscal side of the house is likely to get louder from the Fed. We would not be surprised if Chairman Powell reiterates the need for additional fiscal stimulus during his speech today in Jackson Hole,” Ripley said.

Benzinga’s Take: This week’s jobless claims report is mostly in-line with the trends investors have seen in the economy for the past several weeks. The SPDR S&P 500 ETF Trust (NYSE: SPY) traded higher by 0.3% on Thursday morning after Powell said in a speech that the Fed will implement a policy of “average inflation targeting” that aims to push inflation levels “moderately” above its 2% target.

 

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