The Initial Jobless Claims came out this morning at 584,000 versus a survey of 575,000. Last month was revised up by 5,000 as well. Bad news right? WRONG! Apparently the market likes this news because Continuing Claims “unexpectedly dropped” as quoted from Bloomberg. Let me clarify what continuing claims is: “number of individuals who are unemployed and are currently receiving unemployment benefits”. What happens when unemployment benefits run out? They fall off the continuing jobless claims number. Excellent, so we are celebrating a number which has declined because 50% of the people who started collecting unemployment never found a job and ran out of unemployment benefits. That seems good for the market. Just to clarify, the number of people running out of jobless benefits at 49.77% is an all-time high since the data was first recorded in January of 1980.
Does this seem like good news to you?
