US Jobless Claims “missing” data.

Many were struck in awe at a much better than expected US Jobless Claim yesterday, with actual figures coming in at  339K vs an expected of 368K. Stocks enjoyed a short-term bounce higher amidst a disappointing week following the news, but does this disparity in expectation reflect a better labor situation in US?

According to Dow Jones, a Labor Department economist said one large state didn’t report additional quarterly figures as expected, accounting for a substantial part of the decrease.

Every state is required to process Quarterly claims due to administrative reasons, E.g. People who were already making claims in the past have to make new claims again and not due to them being newly laid off. It turns out that this particular state did not manage to process the Quarterly claims, and hence did not report them this week. On the other hand, Analysts expectation of a 368K filing has already taken into consideration of such seasonality impact.

It appears that we could see a rebound of Jobless claims next week when the missing data is added back in. However, to attribute the entire difference of 30K filings to the missing data might be incorrect. Though we are not privy to which state failed to submit data as planned, it is highly unlikely that a single state will have 30K worth of Quarterly filings. As such, there is still some reasons to be cheerful despite the unreliability of the figures.

S&P 500 Futures H4

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After the release, S&P rallied beyond the upward trendline but was unable to sustain its push. After Dow Jones revealed the reason for the disparity, market started to price lower accordingly. Currently price is still trading around pre announcement levels.

 

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