Investors and economists received a rather nasty surprise this morning when the Labor Department released its weekly data on initial claims for jobless benefits. According to the Labor Department, new claims for unemployment insurance rose by 19,000 last week to a seasonally adjusted 479,000.
The government did note that some of the surprise increase (a small decrease was expected) may be attributed to difficulties the government has in adjusting for seasonal factors. The four-week average of initial claims increased by 5,250 to 452,250.
No matter the reason for the increase (there are some that will blame it on auto company shutdowns), the news had a negative impact on stock futures. What does this mean for the overall market? The overall mood on the Street has turned sour after a positive day Wednesday. Investors and economists may wait and bide their time today ahead of Friday's monthly nonfarm payroll report. Wednesday's data on private-sector employment was better than expected, the jobless claim report was worse than expected -- add these together and you have the formula for a slightly lower day.
Remember, the big news will be released Friday morning when the July nonfarm payroll report is released. It is major news events like these that could provide major momentum for the market.