Stocks were hemmed in a narrow range on Thursday, with traders struggling to decipher the meaning behind a surprise rise in unemployment, which threatens a 2-day rally that wiped out losses sustained during the worst trading day of 2021.
Sentiment took a hit after data Thursday showed an unexpected jump in jobless claims, which last week set a fresh pandemic-era low. New unemployment filings jumped to 419,000 in the latest week, well above consensus estimates of 360,000.
Since the onset of COVID-19, the data series has served as an avatar of the labor market’s health, and could take on new importance if rising infections start to trigger new restrictions — which may lead to another round of job losses.
“As with the recent resurgence in COVID cases stemming from the Delta variant, the jump in jobless claims is a disappointment. Recovery is never a perfect straight line,” noted Mark Hamrick, a senior economic Analyst at Bankrate.