After yesterday's upbeat ADP report which showed that there were 204,000 new private sector jobs in November we got a "counter-indicator" today with a surprise rise in unemployment claims last week to of 6,000 to 402,000. This was the first time in over a month we have seen the number climb back over the psychologically important 400,000 mark.
This caused the market to be down mildly in the premarket. This disappointing number-the consensus was 390,000-comes with the market waiting for tomorrow's jobs report. While yesterday's numbers were very positive-by themselves it would be enough to bring down the 9% unemployment rate-tomorrow's number is expected to be lower as the public sector has been contracting all year though the pace of state government job losses has seemed to be slowing recently.
However, the market got more whiplash after the ISM manufacturing report came out.
"the pace of growth in the U.S. manufacturing sector rose to 52.7 in November, its strongest level since June, according to the Institute for Supply Management. The reading topped expectations of 51.5, according to a Reuters poll of economists. However, the employment component of the report disappointed economists, falling to 51.8 from 53.5."
There you go even in the report there was more whiplash as the employment component fell. On balance my take on it is that the U.S. economy is improving. You would expect the numbers to have a few zigs and zags and an up trend to not be wholly flat.
The real worry is Europe and whether they will do what is needed. Yesterday gave the market some optimism but hopefully the move was the beginning rather than the end of their action.
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