US jobless claims data beats expectations – but Wall Street struggles
Global stock markets are struggling around or below opening levels today despite an improvement in US jobless data.
The Dow has crept higher, while the Nasdaq has eked out a new intraday high before trimming gains. The S&P 500, which is now under 2% away from February’s all-time high, is trading marginally lower.
Jobless claims drop, but the overall picture remains bleak
Markets are little cheered by the latest labour market data, with investors instead awaiting any news of progress as lawmakers continue to argue over a new stimulus bill. The proximity of tomorrow’s nonfarm payrolls report is also keeping markets soft.
This is despite initial weekly jobless claims printing at 1.186 million – well below the 1.415 million expected by analysts and also the lowest reading since the pandemic sent claims jumping by nearly 7 million at the end of March.
Continuing claims – which counts those claiming benefits for two or more consecutive weeks – have dropped from 16.95 million to 16.10 million, again below forecasts.
While this points to improving labour market conditions, the bigger picture remains bleak. This is the 20th straight week that the US has registered more than a million new weekly claims. 31 million Americans remain unemployed.
The figures have further complicated the outlook for the labour market, which had been showing signs of weakening again. Yesterday’s ADP private payrolls report showed jobs growth of just 167,000 compared to expectations of over 1 million.
Nonfarm payrolls in focus – is the jobs recovery under threat?
The latest numbers will put tomorrow’s nonfarm payrolls report under even greater scrutiny, as markets look for more clarity over the direction of the labour market.
Economists expect payrolls grew by 1.6 million, which represents a sharp slowdown in jobs gains after payrolls jumped 2.7 million in May and 4.8 million in June. However, payrolls returned to growth more quickly than expected.
President Donald Trump has promised “big jobs numbers are coming on Friday”.