Instant View: Weekly claims up sharply, distortion cited

Reuters

The number of Americans filing new claims for unemployment benefits rose last week, reversing a sharp decline in the prior week but still pointing to a labor market that is slowly healing.

KEY POINTS: * Initial claims for state unemployment benefits rose 46,000 to a seasonally adjusted 388,000, the Labor Department said on Thursday. * The prior week's figure was revised up to show 3,000 more applications than previously reported to 342,000. * A Labor Department official said it appeared that state-level administrative issues were distorting the data. * The government adjusts its readings for claims to take into account regular seasonal swings. Claims usually increase at the beginning of a quarter, but one state appears to be following a different pattern than normal in reporting its claims, which led to the wild fluctuations over the last couple of weeks, the official said.

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COMMENTS: JOSEPH TREVISANI, CHIEF MARKET STRATEGIST, WORLDWIDE MARKETS, WOODCLIFF LAKE, NEW JERSEY:

"Jobless claims reverted to trend at 388,000, last week's large drop was statistical. Improvement in the labor market will continue to be fitful and slow."

URI LANDESMAN, PRESIDENT, PLATINUM PARTNERS IN NEW YORK:

"On the one hand, you never want to respond too much to one data point, but on the other, this market is priced for perfection. I've expected the market to crack 100 times; we have to go down on this. This could be the start of a correction."

MARKET REACTION:

STOCKS: U.S. stock index futures added to losses BONDS: U.S. bond prices posted modest gains FOREX: The dollar was little changed

(Americas Economics and Markets Desk; +1-646 223-6300)