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Iran tensions, jobless claims — What to know in markets Thursday

Heidi Chung

Stocks jumped to record highs Wednesday, despite lingering geopolitical tensions in the Middle East. Though conflict may have thawed somewhat, investors will continue to be on high alert Thursday.

On the economic data front, the U.S. Labor Department will release initial jobless claims data for the week ended Jan. 4. Economists polled by Bloomberg expect the number of Americans filing for unemployment benefits to tick lower from the prior week to 220,000.

A job fair in New York City. (Photo by Spencer Platt/Getty Images)

Thursday’s jobless claims report comes on the heels of a strong ADP employment report for December. The private sector added 202,000 positions last month, up from the 67,000 job additions in the previous month. It was the strongest monthly gain since April 2019. Though the ADP report is not always a reliable indicator of what the Bureau of Labor Statistics (BLS) report will illustrate, it does provide a bit of insight into the health of employment in the U.S.

“Despite the strength in the ADP data, we continue to look for the BLS report to show that nonfarm employment increased 125,000 in December (private payrolls: 120,000), and there are a few reasons that the BLS data could deviate from the ADP data,” J.P.Morgan economist Daniel Silver wrote in a note Wednesday. “There are often deviations between the two reports (especially when comparing first prints) because of differences in the two approaches to measuring employment. The ADP data also were much weaker than the BLS data in November 2019 (especially when comparing first prints); so, the strength in the December ADP report may be payback for the softness in November that may not show up in the BLS data.”

Meanwhile, the only notable earnings announcement scheduled for Thursday will be from KB Home (KBH) after the market close.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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