U.S. INITIAL JOBLESS CLAIMS

Jobless claims rose by 4,000 for a second week to reach 372,000 in the period ended Aug. 18. Unemployment has been above 8 percent since February 2009 – – the longest stretch in the post-World War II era. Last week I drew attention to the loss of momentum on the U.S. Jobless Claims data. There is a downtrend, and yes Jobless claims have been going down when compared with April 2009 peak. However, the pace of the downtrend has been decelerating. As of this week, the 52 week moving average is at 382,000 level and I believe this technical resistance should be respected. Further weakness in unemployment data has the risk of breaching 382,000 level and reversing the 3 year-long downtrend. This could result in higher unemployment rate.