Unemployment Claims Grow Unexpectedly
In the final week of January, initial jobless claims rose unexpectedly by 8000, bringing the week's total to 480,000. While forecasts initially indicated the peaks experienced toward the beginning of the month would recede, economists now suggest that the numbers will stabilize around the current level.
This is a considerable change from the decline to 455,000 initial expected for the week. No sufficient explanation has really been given yet for the increase. The Labor Department unconvincingly tried to blame the initial discrepancy on "administrative catch-up," but that seems rather unlikely.
The news hit the financial markets hard, causing the Dow to fall 2.61 percent today. With the future looking more and more uncertain, stocks are not likely to bounce back right away and we may be looking at further contraction of the markets for the short-term.