The claims report “is consistent with the improving jobs numbers and consumer confidence we’ve been seeing,” Brian Gendreau, a market strategist at El Segundo, California-based Cetera Financial Group Inc., said in a telephone interview. The firm has about $20 billion in assets under management. “It just adds to the picture of a U.S. economy that’s recovering. Not as fast as anyone would like, but still improving.”
Stocks extended gains after Labor Department figures showed fewer Americans than forecast filed first-time claims for unemployment benefits last week, which may reflect difficulty adjusting the data for seasonal swings at the start of a new quarter.
Applications for jobless benefits dropped 30,000 to 339,000 in the week ended Oct. 6, the fewest since February 2008. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey. One state accounted for most of the plunge in claims, a Labor Department spokesman said. The year’s increase was smaller than projected, because one large state showed a drop rather than an increase, said the spokesman, who declined to name the state. The breakdown by state will show up in next week’s report.
“The economy is improving, we’re doing a better job,” Philip Orlando, the New York-based chief equity strategist at Federated Investors Inc., which oversees about $370 billion, said by phone. “I think we should be going faster but this is a phenomenal claims number. So now the question is, ‘Is this number real or is it going to get revised away next week?’” He said, “Give me some meat so I understand why it’s a good number and whether it’s sustainable.”