Phew, claims drop but still elevated

After the sticker shock report last week of 504k (revised from 500k), Initial Claims totaled 473k, 17k below expectations. The 4 week average though did tick up to 487k from 484k and is at the highest since late Nov ’09. Continuing Claims, delayed by a week and lasting up to 26 weeks, fell by 62k but Extended Benefits rose by 301k and is up 1.9mm over the past three weeks as those that temporarily lost benefits, after the expiration and prior to the re-initiation of another benefit extension by Congress, rejoin. Bottom line, after last week’s disappointing figure, today’s # is certainly a relief but it doesn’t change the fact that it’s still very elevated at this point of an economic expansion as the labor market still remains very sluggish with businesses still reluctant to hire and take risk.

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