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Futures down slightly amid earnings, jobless claims unexpectedly rise

Yahoo Finance’s Emily McCormick joins The First Trade with Alexis Christoforous and Brian Sozzi to discuss second-quarter earnings from BJ's Wholesale Club. McCormick also breaks down the weekly jobless claims report, which unexpectedly rose.

Video Transcript

ALEXIS CHRISTOFOROUS: Emily, I know that we also look at continuing claims. What are they telling us about the health of the labor market right now?

EMILY MCCORMICK: Well, good morning, Alexis. And taking a look at the Department of Labor's jobless claims report this morning, we did get a disappointing print on the state of the economic recovery. We saw those initial jobless claims for the week ended August 15 at 1.1 million, just to reiterate that headline figure here. Higher than the 920,000 that had been expected and the upwardly revised 971,000 during the prior week.

Now, this brought the total number of new claims filed since the week ended March 20 to more than 57 million. Taking a look here by region, the majority of states did report increases in new claims on an unadjusted basis last week. That's something we haven't seen over the past couple weeks that we had seen improvements. Now, California again had the greatest number of new claims at more than 200,000, while New Jersey had the greatest increase at nearly 11,000 last week. That was followed closely by Texas with an increase of more than 9,000.

Now, turning to those continuing jobless claims, those did improve to a new pandemic-era low of 14.8 million for the week ended August 8. Now, this brought the insured unemployment rate down to 10.2%. That was the lowest level since April. But I do want to caveat here that continuing claims are reported on a one-week lag. So we may see some volatility here in next week's report.

A couple other things to keep in mind as we take a look at this report. This was the first one that we had since the end of the Paycheck Protection Program-- which stopped accepting new applications on August 8-- that had been a key source of support for many small businesses in helping keep employees on their payrolls during this pandemic period. It's also one of the first reports that we had since the lapse in enhanced federal unemployment insurance benefits at the end of July.

So a couple of things here contributing to what we're now seeing as a slowdown in the labor market recovery, Alexis.

ALEXIS CHRISTOFOROUS: All right, Emily. I want to switch gears and talk earnings, because we have another retailer out-- BJ's Wholesale Club. Spectacular earnings beating on both the top and bottom line, but again, we're seeing a trend here. Digital sales through the roof, up something like 300%. What drove that demand?

EMILY MCCORMICK: That's right, Alexis. So we did see BJ's Wholesale digital sales up 300% during the second quarter. Huge gains here, similar to what we saw with other retailers like Target, Walmart posting huge gains on that digital side. We think about comparable club sales. Excluding gas sales, those are up 24.2%. Huge beat there as well.

Net sales hit a quarterly record of $3.95 billion, growing 18% year over year. If we take a look at bottom line results, those were also a big beat. We had adjusted earnings up more than 90% over last year to $0.77 per share.

So BJ's Wholesale getting a similar boost to what we've seen from Costco and Kroger. Really consumer pantry stocking during the pandemic period and stay-in-place orders contributing to results here. We do have those shares adding to gains of more than 91% for the year to date. They're trading higher by about 3% in premarket trading. Alexis.