Jobless claims in the U.S. dropped last week. In the week ended 2 February, the initial jobless claims dropped by 19k to 234k from an unrevised 253k a week ago. The sharp fall was consistent with expectations since the Labor Department recorded last week that seasonal adjustment difficulties and increased filing by government contractors were greatly responsible for the rise in claims in the week ended 26 January.
Given the end of the federal government shutdown, the rise in claims was expected to reverse, noted Barclays in a research report. In spite of this week’s drop, the four-week moving average rose to 225k. Elsewhere in the report, continuing claims dropped 42k to 1.736 million in the week ended 26 January and the insured jobless rate remained stable at 1.2 percent.
“Next week is the survey week for the February employment report, and we expect that report to send mixed signals. On one hand, the weekly initial claims data are likely to be near current levels, if not move a bit lower as the remnants of the government shutdown fade from the weekly claims data”, said Barclays.
However, the level of initial claims for the week ended 12 January was 212k and it is likely to be the case that the four-week moving average for the February survey week would be above that observed in the January survey week.
“Altogether, we doubt the shutdown-induced volatility in initial claims has any signal for February hiring and see labor market conditions as strong as they have been in three decades”, added Barclays.
At 19:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was bullish at 78.6051 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
