Initial jobless claims at 259,000 for the week ended October 17
According to the U.S. Department of Labor, initial jobless claims stood at 259,000 for the week ended October 17, 2015. Although this figure was better than the consensus estimate of 265,000, the claims increased by 3,000 from the prior week’s revised level.
XLI falls with increase in jobless claims
An increase in a jobless insurance claim indicates a rise in the number of Americans depending on state funds. A weakness in industrial production due to a slowdown in Chinese and other emerging economies has resulted in declining manpower requirements.
The Industrial Select Sector SPDR ETF (XLI) fell 3.8% year-to-date as of October 22. Industrial machinery stocks such as ABB (ABB), Parker Hannifin (PH), Emerson Electric (EMR), and Eaton (ETN) fell 14.1%, 21.9%, 22.6%, and 20.0%, respectively, over the same period.
Continuing jobless claims increased to 2,170 thousand for the week ended October 10
Reported with a one-week lag, the continuing jobless claims in the United States rose to 2,170 thousand in the week ended October 10, up by 6,000 from the revised level of 2,164 thousand in the previous week. There were no particular factors noted for the declining claims in the third week of October.
Although the reading increased this week, it has remained below 300,000 for quite some time. This implies that the labor market is regaining strength with a sustainable domestic demand and with no substantial increase in claimants in the recent past. However, it also implies that businesses are cautious about new hirings with the weakness in the global economy.
Along with the employment report, optimism in consumer sentiment is also required to drive economic growth. We’ll cover that in the next article.