As a lack of job creation continues to drive worry about where the U.S. economy is headed, all eyes will be on the Labor Department's September jobs report on Friday.
Mixed signals from recent economic data suggest that the report will be a nail-biter: weekly jobless claims were reported down and private-sector hiring up, but the unemployment rate is nevertheless expected to rise.
Analyst consensus calls for an increase of 90,000 jobs in September, which would confirm market bulls' sentiment that the economy is not headed toward a double-dip recession. Still, volatility and mixed economic signals have market watchers sifting carefully through recent data to get a better sense of the current state of the jobs market.
On Thursday, the Labor Department. reported initial claims for state jobless benefits totaled 401,000 in the week ending Oct. 1, an increase of 6,000 from the previous week's revised figure of 395,000. The slight rise nevertheless keeps claims in the 400,000 territory that suggests the labor market may be improving. The statistically more significant four-week moving average was 414,000, a decrease of 4,000 from the previous week's revised average of 418,000.
"This is very encouraging," said Ian Shepherdson, chief U.S. economist for High Frequency Economics Ltd., in Valhalla, New York, in an analyst note. "Claims are now back to the level prevailing before Hurricane Irene, so the simplest explanation for their recent behavior is that the storm drove claims up for a time … and now they have fallen back to trend. The only problem with this view is that the Labor Dept has said it sees no Irene effect. We think they are wrong. For now, these numbers look good, though we can't be sure they'll stay that way given weak business confidence."
Also on Thursday, ADP Employer Services reported that companies added 91,000 jobs to the private sector in September. The increase followed a revised 89,000 gain in August. Economists had expected an increase of just 75,000 in September.
To be sure, even if Friday's jobs report meets analysts' expectations, it won't necessarily reflect a lower rate of unemployment. The U.S. unemployment rate has proved to be stubbornly sticky, hovering around 9% for 26 out of the last 28 months.
