Weekly Jobless Report, the week of September 23rd

This morning the Labor Department released its weekly report on first time claims for unemployment insurance. For the week ended September 23 claims fell by 31,000 to 335,000, the largest drop in two months. Today's number pulled the smoother four-week moving average of new claims down as well.

A declining trend in claims for unemployment insurance has positive implications for the economy. If fewer people are becoming unemployed then more people may be earning income that they can spend to buy the goods and services that they and other employed persons are producing. If this is so, the companies that these employees work for will have greater revenues. And, if those companies are well managed, their earnings will rise, which sooner or later translates into higher stock prices. Ain't economics wonderful?!!

The initial response of the good-news-is-bad-news bond market was to move slightly down. But, shortly after the opening, the DJIA was slightly up.

MF Merlin

Transmitted: 95-09-28