Disturbing Jobs Data
Weekly jobless claims, a leading indicator of both the labor market and the U.S. economy were released this morning. Claims came in at 404,000, a drop of 1,000 from last week, but still above the crucial 400,000 mark that signals trouble. The four week moving average, which smoothes out the weekly volatility, came in at 408,000. Over the last 20 years, average weekly jobless claims of 408,000 have been consistent with monthly payroll employment growth of about 5,000. Just to prevent the 9.1% unemployment rate from rising, the U.S. must create at least 100,000 net new jobs per month. Without a sustained drop below 400,000 in the jobless claims numbers, unemployment is likely to remain disturbingly high.