The Holidays Impacted the Jobless Claims Count

Jobless Claims Joyous or Just Jolly?

The market celebrated weekly jobless claims that dropped under the psychological 400K mark, but we suggest tempering your enthusiasm, as the Christmas holiday likely played a role.

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Holidays Impact Jobless Claims

In previous publishings here, we have foretold of the market mania that might manifest should jobless claims approach and subvert the psychological, and increasingly meaningful, 400K mark. We have highlighted the market's enthusiasm as it neared the threshold on several occasions, and I continue to believe much of the December market drive has been due to the unemployment claim dive that has coincided with it. The four-week moving average of jobless claims fell 12,500 in the latest week, and the Dow is up 5% for December with one day to go.

Weekly Jobless Claims were reported Thursday for the period ended December 25. The claims count dropped 34,000, to 388K. Economists were stunned, since the consensus forecast was set at 415K (but they never vary far from the prior week result). The four-week moving average was much closer to the conservative forecast for the weekly figure, as it fell to 414K. The advance seasonally adjusted insured unemployment rate measured the prior week's data, which concluded on December 18th, and so did not participate in the joy expressed this week – insured unemployment increased a tenth of a point to 3.3%. The insured unemployed count increased by 54K heads.

Logic seems to say that the latest week's surprise has something to do with human consideration or at least general malaise. One or the other should be behind the latest week's good news, since it was, after all, the week before Christmas. We would hope executive decision makers and HR executioners fell on the side of kindness, but we know better. The weeks of late December offer general malaise throughout the office space, and very little gets done, including layoffs.

Believe it or not, that same malaise might even have extended to the folks who got fired last week, as stocking filling government aid is not often high on the wish list for St. Nick. Therefore, market mavens, tread carefully with your paper profits, as post holiday data might offer a return to labor market malignancy and weekly jobless counts above 400K.

FYI:

The highest insured unemployment rates in the week ending Dec. 11 were in Alaska (7.3 percent), Puerto Rico (5.1), Montana (4.8), Oregon (4.8), Pennsylvania (4.6), Idaho (4.5), California (4.4), Nevada (4.3), New Jersey (4.2), and Wisconsin (4.2).

The largest increases in initial claims for the week ending Dec. 18 were in New Jersey (+5,235), Michigan (+3,087), Missouri (+2,404), Florida (+2,281), and Oregon (+2,026), while the largest decreases were in California (-7,656), Illinois (-3,149), Georgia (-1,935), Pennsylvania (-1,574), and Texas (-1,494)



Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), SFN Group (NYSE: SFN), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.OB), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM).

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