Weekly initial jobless claims fell 6,000 in the latest week to 422,000, and the 4-week moving average declined 14,000 to 425,500. Continuing claims were nearly unchanged at 3.71 million.
Attention now shifts to tomorrow’s all-important labor report from the government. But before we talk about non-farm payrolls and the release of the unemployment rate, it’s important to spend a moment on the weekly claims number.
Jobless claims jumped above 400,000 in early April and offered up the first evidence that the recovery was beginning to slow.
Subsequent data have showed we’re in another economic soft patch, but yesterday’s talk from some analysts that we’re headed into a new recession is premature in my view.
As I’ve repeated in the past, weekly jobless claims are an excellent barometer of economic health, and claims, though elevated, seem to have plateaued in recent weeks.
Keep an eye on this report for an early warning sign of further economic weakening, but at this point, slow growth is probably the most likely path.
Upcoming labor report
Tomorrow’s report from the government is expected to show 190,000 new jobs, including 210,000 generated from the private-sector, according to Bloomberg. The unemployment rate is forecast to fall from 9.0% to 8.9%.
Note: latest survey by Bloomberg reflects reduced expectations as analysts incorporate slower growth and weak ADP number in forecasts. Nonfarm payrolls up by 170,000 (even worse, a MarketWatch survey sees 125,000) and private sector up by 180,000.
Anything near 180,000 would alleviate some of the concern swirling around the recovery, but we’re likely to get a one-time boost from McDonald’s, which reportedly added between 50,000 – 60,000 new jobs in late April and early May.
That would put private-sector job creation at about 130,000. Not very impressive but not as jarring as yesterday’s figure from ADP.
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