The economy has started to grow again as evidenced by the first report on Q3 GDP, but companies continue to shed jobs at a pace that suggests we have not yet seen a peak in the jobless rate.
Weekly initial jobless claims dipped a scant 1,000 to 530,000 in the latest week, while the 4-week moving average fell 6,000 to 526,250. At an uncomfortably high level above 500,000, next week’s report on nonfarm payrolls is probably set to disappoint.
Continuing claims, however, dropped 148,000 to 5,797,000. Still, the decline is more likely to be occurring because standard six-month benefits are running out.
Although manufacturing is growing again as companies rebuild depleted stockpiles, and the stock market continues to foreshadow an improving economy, the labor market has yet experience the turnaround.
Job growth typically lags in an economic recovery. And the modest growth we’ve seen so far suggests a jobless recovery may be on the horizon.
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