Posted At : September 4, 2009 1:15 PM
This morning the Labor Department said the number of people filing for unemployment claims fell last week by 4,000 to 570,000. However, the market had been expecting a bigger drop to 560,000. The number of people continuing to receive benefits rose. It’s hard to believe that a consistent monthly loss of ½ a million jobs is acceptable, but the market is assuming it will turn around soon. I don’t really see how, as many of these jobs will not be needed in the new economy. The market is also sifting through a number of sales reports from retailers. Overall, sales are still weak, but many companies, including Target Corp., Costco Wholesale Corp. and Limited Brands Inc., beat expectations. In addition, the Institute for Supply Management said its service index, which covers hospitals, retailers, financial services companies and more, came in at 48.4 in August, from 46.4 in July. Economists polled by Thomson Reuters expected a reading of 48. A figure below 50 indicates the service sector is shrinking. Recent reports on housing and manufacturing have recently shown improvement, but unemployment, and the resulting clampdown on consumer spending, has to raise concerns that the economy is not healing fast enough.