Today looks like a nail-biter on Wall Street, as investors watch the accelerating slide of mortgage guarantors Fannie Mae and Freddie Mac.
Lost in the gloomy economic news was a positive report from the Department of Labor that initial claims for unemployment insurance last week dropped by 58,000 to 346,000 on a seasonally adjusted basis. Claims at or above 400,000 per week are usually associated with increasing unemployment.
The data from last week are hard to interpret because they include the 4th of July holiday. Also, the seasonally adjusted trends didn't match the unadjusted trends--the raw number of new claims rose substantially from the week before. In addition, the total number of people collecting unemployment insurance increased.
This year's slowdown in economic growth has been felt especially acutely in the labor market, where unemployment is about one percent higher than it was last spring. If the latest unemployment claims numbers hold up and continue, we could see joblessness stabilize.