More people applied for unemployment benefits last week, the first increase in three weeks and evidence that the job market is still sluggish.
The Labor Department says that the number of people seeking benefits rose by 10,000 to a seasonally adjusted 424,000. A department spokesman says no states cited extreme weather as a factor in the increase. Tornadoes and floods have devastated several states in the Midwest and South in the past month.
Applications are above the 375,000 level that is consistent with sustainable job growth. Applications peaked at 659,000 during the recession.
Still, the four week average, a less volatile measure, declined for the first time in seven weeks to 438,500.
Employers stepped up hiring this spring, but some economists worry that rising applications indicate hiring is slowing.
The government’s first revision of the nation’s first quarter GDP shows the economy did not improve as many had expected, growing at an annualized rate of +1.8% during the quarter. This was below the estimates for a growth rate of +2.0% and in line with the initial report’s +1.8%.
For reference purposes, Q4’s rate was 3.1%, Q3 +2.6%, Q2: +1.7% and Q1 2010 was +3.7%.
It will be interesting to see if the market “sells” this news, or like yesterday, does it lead to a “buy the bad news,” because of the notion that bad economic reports like these will force the Fed to keep supplying stimulus. Either way, we’ll continue to trade based on the charts. Right now, we’ve got our eyes on the 810-820 area for the Russell 2000, a break below or above should signal the markets next move, be it the downside or upside.
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