The Jobless claims numbers out earlier this morning are more exciting than usual. This is because tomorrow the biggest unemployment number of the year is coming out. The numbers come out after the solid ADP report today, and Mitt Romney‘s huge victory over Barack Obama in the first Presidential debate. Analysts are forecasting around 100,000-120,000 non farm payroll numbers, after today’s initial claims came in at 367,000, slightly below forecasts of 370,000. Let us have a closer look at the numbers:
Initial jobless claims for the week of September 29 increased +4k to 367k after the prior week was revised up +4k (to 363k). This kept the 4-week moving average, which is still elevated from the effects of Hurricane Isaac, steady at 375k. If we get a similar number on claims next week, the average will decline closer to 370k as the effects of the Hurricane recede. In other details of the report, continuing claims were unchanged at 3281k after the prior period was revised up +10k. This had the effect of lowering the 4-
week moving average -13k to 3285k-near the post recession low reached in May (3268k).
Deutsche Bank AG (NYSE:DB) notes that ‘today’s data come too late in the month to tell us much about tomorrow’s nonfarm payroll report but the fact that claims remain steady in the 365k – 375k range tells us that the labor market is at the very least not deteriorating. We continue to anticipate +110k on headline nonfarm payrolls (+120k private) and we expect the unemployment rate to remain unchanged at 8.1%.’
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Jobless claims rose a bit less than expected last week. There’s typically an increase in the variance of the weekly figures in the last four months of the year. The four-week average has been little changed in recent weeks, consistent with a moderate pace of growth in nonfarm payrolls (100,000 to 150,000 per month). Announced layoff intentions edged up in September (figures are not seasonally adjusted). It was the lowest total for a September since 1997. Year-to-date, layoff announcements were down 19% from the first nine months of 2011 and the total for the last three months was down 56% from the same period last year. Government layoff announcements for the first nine months of the year have been a lot lower than last year (14,186, vs. 119,027). Announced hiring intentions jumped to 425,683 (vs. 12,079 last month and 76,551 a year ago), but these are nearly all temporary seasonal jobs in retail and food.
Raymond James expects non farm payrolls to come in at 120,000, while Dolmen forecasts 111,000 jobs. Citgroup (NYSE:CS) forecasts 110,000 jobs, and Goldman Sachs (NYSE:GS) expects non farm payroll jobs of 100,000.
There will be huge political ramifications to the numbers tomorrow. A bad number will give Romney cannon fodder to use against President Obama. A solid number, will allow Obama to claim that his economic plan is working. It will be the most important job report of the Presidential campaign.