Initial U.S. jobless claims decreased 58,000 to 346,000 for the week ended July 5, the U.S. Labor Department announced Thursday. Claims for the previous week were unrevised at 404,000.

Economists surveyed by Bloomberg News had expected this week's initial jobless claims to total 399,000.

Also, the four-week moving average decreased 10,000 to 390,500. Economists view the four-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.

Economist Peter Dawson said investors / traders should not react too favorably to this week's jobless claims picture. "It is a surprisingly good number, but keep in mind it's just one week," Dawson said. "Also, continuing claims are still rising and have been trending higher for more than six months. That stat is more indicative of the soft job conditions the U.S. is currently experiencing."

New York Times (NYSE: NYT) columnist and economist Paul Krugman, author of The Conscience of a Liberal, would never be confused with a loyal backer of the economic policies of President Bush.

Still, Krugman, in the academic tradition that argues that a scholar's most important word is "valid," gives President Bush credit where credit is due -- or at least a lack of blame. Krugman says it's true that the U.S. economy is a mess, but it's not true that the bad economy is entirely President Bush's fault.

Krugman outlines the unfortunate reality regarding the U.S. economy's 2001-2008 performance: recession, followed by one of the weakest recoveries since World War II, followed by another slump that technically isn't a recession yet. When President Bush leaves office, Krugman says, the U.S. economy will have created five million jobs, not nearly enough to keep up with population growth. By contrast, 22 million jobs were created during the Clinton Administration.

The U.S. economy lost another 62,000 jobs in June, the U.S. Labor Department announced Thursday, as surging fuel prices forced companies in the world's largest economy to continue to cut expenses to protect profits in the face of the economic slowdown.

Meanwhile, the unemployment remained at 5.5% in June, the highest level since October 2004.

Economists surveyed by Bloomberg News had expected the U.S. economy to shed 50,000 jobs in June. Furthermore, June was the U.S. economy's sixth straight monthly job loss. The U.S. economy lost a revised 62,000 jobs in May, up from the 49,000 earlier estimate; the U.S. economy lost 28,000 jobs in April.

The June job losses brought total job losses in 2008 to 438,000, the Labor Department said.

Meanwhile, the number of unemployed persons was unchanged at 8.5 million in June. Since March 2007, the number of unemployed persons has increased by 1.2 million, and the unemployment rate has risen by 1.5% point.

Let's just say that if the Dow Jones Industrial Average on Thursday closes down 200 points, we'll call it a moral victory. The Dow Wednesday closed down 166.75 points to 11,215.75.

"What was that famous Bette Davis line about a bumpy night? Well, Thursday could be a bumpy day," economist Peter Dawson told BloggingStocks Wednesday.

Thursday could be very bumpy for the stock market because a series of data points -- all expected to be negative -- are converging at a traditionally difficult time of the year for the market - the start of summer.

Three data points of significance

First up is the European Central Bank's interest rate decision at 7:45 a.m. EDT, at which the bank is expected to increase its key, short-term interest rate, the refinance rate, by a quarter-point to 4.25%. The ECB is trying to check inflation, Dawson said, but it may end up hurting the dollar. If the markets believe the already-weak dollar will fall further, that will increase commodity prices, including oil, "which will not be good news for stocks," he said.

Non-farm private employment decreased 79,000 in June on a seasonally adjusted basis, ADP announced Wednesday in the ADP National Employment Report. (pdf)

Meanwhile, the May estimated change in employment was revised down 15,000 to a gain of 25,000 jobs, ADP said.

In the June jobs report, employment in the service-providing sector fell 3,000, its first declined since November 2002. The goods-producing sector declined 76,000, and manufacturing employment fell 44,000, their 19th and 22nd consecutive monthly declines, respectively.

Employment among small-size businesses, defined as those with fewer than 50 workers, rose just 7,000 during the month, while employment at large businesses with more than 500 workers declined 51,000. Jobs at medium sized business, with 50-499 employees, decreased 35,000.

If you believe the Dow Jones Industrial Average is a leading indicator of economic conditions six to nine months ahead, Tuesday's Dow activity is not good news.

The Dow officially entered bear market territory when a Tuesday morning decline drove the world's most followed stock market average beyond the level indicating a bear market -- down 20% from the October 9, 2007 high of 14,165.

What exactly is a 'bear market'?

Technical analysts, economists, and others argue that a 10% decline -- called a correction -- is a normal pull-back or pause in a bull market, a market where most stocks are likely to rise.

However, a 20% or greater decline is not healthy. Technical analysts say it indicates investors and traders are not simply taking short-term profits, but are concerned about the prospect for stocks in the quarters ahead -- three to nine months out -- and are exiting the market, in favor (historically) of bonds and cash.

For the above reason, 20% declines are usually interpreted by market advisors and participants as a sign that stocks are likely to be under pressure in the months ahead.

That the U.S. economy has recorded a series of rather negative statistics lately, would not be a revelation to the informed investor / trader.

That the U.S. economy is set to record a new data point of ignominious distinction, perhaps would be.

Assuming a modest 50-point close higher or lower Monday, the Dow Jones Industrial Average will have declined about 9% in June 2008, its biggest drop in June since June 1930 in the Great Depression, when the Dow fell 18%.

At mid-day Monday, the Dow was up about 45 points to 11,390.95. The Dow is down about 3,000 points since trading above the 14,200 level in October 2007.

Stock analyst C. Leonard Bauer said "the Dow reflects the underlying economic reality."

Many negative fundamentals

'We have a smorgasbord of negative fundamentals. Housing is in a deep slump. Oil and gas prices are at 20-year highs. Corporate costs are rising. Disposable income is falling. Credit requirements are way up. Inflation is rising. And job growth doesn't look too good right now," Bauer said. "Other than that, as Groucho Marx would say, everything is fine economically."

Another factor weighing on stocks, at least for the near-term: 'sell in May and go away' - - the seasonal closing out of positions, particularly winning positions, Bauer said, as key decision makers at institutional banks and investment / hedge funds head for the Hamptons (Long Island, N.Y. ), the south of France, and other destinations, for the summer.

The Index of Leading Economic Indicators increased 0.1% in May, the Conference Board announced Thursday. (pdf)

Economists surveyed by Bloomberg News had expected the May index to remain unchanged in May. The index increased 0.1% in April and was unchanged in March.

The leading index has risen for the past two months, following a steady decline that began in the middle of last year, the board said. However, the number of components that are falling continues to be greater than the number of components that are rising over the past six months.

Initial U.S. jobless claims decreased 5,000 to 381,000 for the week ended June 14, the U.S. Labor Department announced Thursday. However, the total was still above the consensus estimate. Claims for the previous week were revised 26,000 higher to 386,000.

Economists surveyed by Bloomberg News had expected this week's initial jobless claims to total 375,000.

Also, the 4-week moving average increased 3,250 to 375,250. Economists view the 4-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.

Economist Peter Dawson said the jobless claims picture reflects the tepid U.S. economy. "We're not seeing jobless claims as high as in previous economic slowdowns, but jobless claims are still trending higher, as evidenced by the 4-week average," Dawson said. "We have the slowest of economies that's not creating new jobs but not resulting in mass lay offs, either, so far."

U.S. consumer confidence in early June plunged to its lowest level in 28 years, an indication American adults are becoming increasingly concerned about rising energy and food prices, job layoffs, and the prospects for a U.S. economic recovery.

The Reuters/University of Michigan Surveys of Consumers said its reading of confidence fell to 56.7 in June from 59.8 in May.

It was the index's lowest reading since May 1980 -- a period also characterized by high oil/gasoline prices and a sluggish U.S. economy.

Economists surveyed by Bloomberg News had predicted that the May index would fall to 59.8. The index stood at 62.8 in April 2008 and 69.5 in March.

U.S. public: jittery

Economist Peter Dawson told BloggingStocks Friday, June's consumer sentiment reading shows an American public "with a warranted case of the jitters."

The U.S. economy lost 49,000 jobs in May, the U.S. Labor Department announced Friday, as companies in the world's largest economy continued to cut expenses to protect profits in the face of the economic slowdown.

Further, the unemployment rate surged 0.5 percentage points to 5.5% in May from 5.0% in April. It was the largest percentage point increase in the unemployment rate since 1986, the Labor Department said. It's also the highest unemployment rate since October 2004.

Economists surveyed by Bloomberg News had expected the U.S. economy to shed 60,000 jobs in May 2008 and the unemployment rate to rise to 5.1%. Also, May was the U.S. economy's fifth straight monthly job loss. The U.S. economy lost a revised 28,000 jobs in April.

Further, the number of unemployed persons increased by 861,000 to 8.5 million in May. The average work week in May was unchanged at 33.7 hours.

Economist David H. Wang told BloggingStocks Friday that if the U.S. economy is not in a recession, it's barely growing. "These May job loss numbers indicate that if the economy is not recession it's the weakest growth possible. We are in a growth recession because unemployment is now leaping ahead," Wang said. "Companies are continuing to belt-tighten and become more cautious, jobs are being cut, and vacant positions are not being filled. It's almost impossible for the economy to sustain these type of job cuts and not be in a recession."

Initial U.S. jobless claims decreased 15,000 to 357,000 for the week ended May 24 - - below the consensus estimate, the U.S. Labor Department announced Thursday. Claims for the previous week were revised 7,000 high to 375,000.

Economists surveyed by Bloomberg News had expected this week's initial jobless claims to total 374,000.

Note: The Labor Department cautioned that jobless claims reported for the previous week may have been unusually low, due the Memorial Day holiday, which may have prevented some individuals and companies from filing claims.

Also, the 4-week moving average decreased 2,500 to 368,500. Economists view the 4-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.

Non-farm, private employment increased by 40,000 in May on a seasonally-adjusted basis, ADP announced Wednesday in the ADP National Employment Report. (pdf)

Meanwhile, the April 2008 estimated change in employment was revised up 3,000 to a gain of 13,000 jobs, ADP (NYSE: ADP) said.

The service sector of the economy added 77,000 jobs, while employment in the goods-producing sector declined 37,000 - - its 18th consecutive monthly decline.

Most of the decline in employment during May was accounted for by job losses at large companies, which registered an 18,000-job decline. Meanwhile, small businesses added 61,000 jobs and medium-sized business cut 3,000 jobs.

Conditions in two economic sectors hard hit by the slumping housing sector - - construction and financial activities - - continued to deteriorate. Construction employment fell 13,000 - - its 18th consecutive monthly decline - - bringing the total decline in construction jobs since the peak in August 2006 to 298,000. Employment in financial activities declined 5,000, its third straight monthly decline.

Economic Analysis: In general, a surprisingly upbeat ADP job report. The 40,000 job gain wasn't nearly enough to keep unemployment from rising, but at least it wasn't a decline. However, economists caution that one should not read too much into the monthly ADP job report, due to its limited scope (private sector payrolls). The more-telling indicator is the U.S. Labor Department's monthly payroll statistic, and May 2008's data will be released Friday at 8:30 a.m. EDT. That report is expected to show a 60,000-job decline, according to a Bloomberg News survey of economists.

U.S. consumer confidence in May 2008 plunged to its lowest level in almost 28 years, an indication American adults remain very concerned about the near-term health of the U.S. economy as it moves closer to its first recession in six years.

The Reuters/University of Michigan Surveys of Consumers said its final reading of consumer confidence for May 2008 fell to 59.8.

It was the index's lowest reading since June 1980 - - a period also characterized by high oil/gasoline prices and a sluggish U.S. economy.

Economists surveyed by Bloomberg News had predicted that the May 2008 index would fall to 59.5. The index stood at 62.6 in April 2008 and 69.5 in March 2008.

Family finance, inflation concerns

In the May 2008 survey, half of all families reported that their finances have recently worsened. Also, inflation expectations rose in May 2008 to their highest levels in more than two decades.

Initial U.S. jobless claims increased 7,000 to 372,000 for the week ended May 24 - - slightly above the consensus estimate, the U.S. Labor Department announced Thursday. Claims for the previous week were revised 6,000 lower to 368,000.

Economists surveyed by Bloomberg News had expected this week's initial jobless claims to total 370,000.

Also, the four-week moving average decreased 2,500 to 370,500. Economists view the four-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.

The largest increases in initial claims for the week ending May 17 were in: Pennsylvania, +1,695, Missouri, +1,192, South Carolina, +1,045, Indiana, +919, and Kentucky, +811. The largest decreases were in: Michigan, -3,898, North Carolina, -2,610, Georgia, -1,537, New York, -1,421, and Louisiana, -1,333.

Meanwhile, the number of continuing claims increased 36,000 to 3.104 million from a revised 3.068 million for the week ended May 17, the latest period for which figures were available. Further, the 3.104 million total was the highest continuing claims level since February 2004.

Economic Analysis: A poor weekly jobless report - - one that indicates the job market continues to deteriorate. Weekly claims were above the consensus estimate, and although the four-week moving average dipped, it is still at an elevated level, and above the U.S. Federal Reserve's 'danger level' of 350,000. Further, the continuing claims total remains over three million - - an indication of the difficultly U.S. adults are having trying to secure new employment. That statistic, combined with an elevated four-week average, indicates that labor market conditions are softening - - a decided negative for the U.S. economy.