Initial Jobless Claims totaled 621k, right in line with expectations BUT
the main positive surprise was the 15k drop in Continuing Claims off its
record high which came in 120k less than expected and was the first
decline since January. The insured unemployment rate remained unchanged
at 5%, the highest since 1982 where it got as high as 5.4%. Following
the spike a few weeks ago in claims due to the Chrysler plant shutdown
and GM too, Michigan and Ohio saw a drop. Tomorrow’s Payrolls are
expected to fall 520k with the unemployment rate rising to 9.2% from
8.9%. The current level of claims and the employment component of the
ISM services index should lead to an in line # but predicting govt
payrolls is never easy. Q1 Productivity was revised to a better than
expected 1.6%, up from .8% initially reported and vs the 1.2% that was
forecasted due to an upward revision to output while employee hours
remained unchanged.

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