Payrolls and Jobless Claims Slightly Worse Than Expected, Prepare For More Consumer Spending Weakness

Non-farm payrolls and initial claims both came in worse than expected.

Payrolls shrank by 62,000, more than the prior month’s 47,000 loss and slightly exceeding the 60,000 consensus.

Initial claims rose to 404,000 (above the traditional recessionary level of 400,000 for the first time), up from 388,000 last month and higher than the 385,000 consensus.

The data suggest an employment environment that continues to soften at an alarming rate: further evidence that consumption will soon stall as stimulus from rebate checks drops off.

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