Here's another ugly milestone in the U.S. economy's journey toward recession: Weekly jobless claims for the week ended Nov. 8 rose to 516,000. Not only is that worse than expectations of 480,000 jobless claims, it is the first time since Sept. 2001 that claims have exceeded half a million - a level that some economists believe is an important threshold.
"We have been arguing for some time now that we could see the all-important psychological 500,000-level broken, and it has done just that," said Ian Pollick, economics strategist at TD Securities, in a note. "Now that the floodgates are proverbially open, we expect to see the data get worse."
Ian Shepherdson, chief U.S. economist at High Frequency Economics, pointed out that weekly numbers can be volatile, which means that this latest snapshot of the U.S. labour market does not necessarily establish a trend. But there is a "but" here.
"The Labor Department has not, as far as we know, cited any specific one-time factors boosting claims, so the safest course is probably to assume that this reflects a genuine acceleration in the pace of layoffs," he said, in a note.