By Utta Nuremburg

WASHINGTON (MNI) – The spotlight will be on Thursday’s release of
initial claims for U.S. state unemployment benefits by the Labor
Department, with the market eager to know if last week’s number was an
“overshoot” or indicative of a stalling economic recovery.

The initial jobless claims figure for the week ending August 21 is
expected to fall to 490,000, according to a survey of economists by
Market News International. This follows an unexpected jump by 12,000 to
500,000 in the previous week — the highest level since November 14,
2009.

According to Michael Englund, chief economist at Action Economics,
“we are assuming the numbers will provide some give back this week. Much
of the focus will be on the outcome of the data in an effort to find out
whether or not last week’s ‘big pop’ was an overshoot.”

James O’Sullivan, global chief economist at MF Global says that
“although we are expecting this week’s data to reverse the recent pickup
the net result will still be an overall rise. Any increase above 500,000
would be quite negative.”

With the U.S. Commerce Department Wednesday reporting a
disappointing 0.3% rise in durable goods orders for July, indicating a
cut back in spending by businesses, analysts will be keen to see if
Thursday’s initial claims number confirms that the economic recovery has
ground to a halt.

The 4-week moving average for initial jobless claims will register
at 491,000, if expectations are met. Of note, the 4-week moving average
for August 14 also reached its highest level since December 5, 2009.

Continuing Claims for the August 14 employment survey week are
expected to rise to 4.5 million from 4.478 million the week prior, and
suggests a possible decline in non-farm payrolls in the September 3 jobs
report.

The 4-week moving average for continuing jobless claims will
register at 4.510 million, if expectations are met.

Although the 4-week moving average for August 7 reached its lowest
level since December 20, 2008, this number has not dipped below 4.5
million over the span of the recession.

–Utta Nuremburg is a report with Need To Know News in Washington

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MAUDS$]