U.S. Jobless Claims Rise to 200,000
New U.S. unemployment claims rose by 9,000 to 200,000 in the week ended November 7, the Labor Department reported Thursday. The four-week average stayed at 195,250, and the number of people continuing to receive benefits fell by 20,000 to 1.697 million in the preceding week. For business development companies in the Fly High universe, the connection runs through the businesses they lend to. A sustained rise in layoffs can weaken household spending, leaving some borrowers with less cash to pay interest. If enough loans stop producing interest, lenders have less recurring income to support dividends. With the claims average flat, we see little reason to lower earnings expectations on this release alone. The next thing to watch is whether more loans actually stop earning interest.
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This article is general information, not personalized investment advice. Fly High Investing may hold securities discussed in this article.