The storms have passed, but a cloudy forecast remains for labor market.
Initial jobless claims fell and the four-week moving average of new claims also dropped, presenting growing evidence that labor markets may finally be stabilizing.
Initial claims fell 21,000 to 530,000 in the week ended Sept. 19, while economists surveyed by Dow Jones Newswires had expected a rise of 5,000. The four-week moving average of new claims also fell 11,000 to 553,500.
But while the trend’s improving, levels still remain elevated, signaling a recovery in the labor market won’t happen overnight.
“Of course, there is always the dark cloud to the silver lining,” The Economist’s Free Exchange blog says. Half a million new jobless claims every week is still terrible. And, as Calculated Risk points out, the four-week average likely has to drop below 400,000 before total employment stops falling.
“As is typically the case with positive economic data these days, the news is good, but the hole is deep,” Free Exchange says.
But as initial and continuing claims continue to fall, those filing for some form of extended benefits increased by 85,000, Miller Tabak’s Dan Greenhaus notes.
“The rise in this figure despite the moderation in initial claims is very worrisome, driving home the idea that only powerful and sustained economic growth beyond the next two quarters will be needed to address the labor market picture,” Greenhaus says.
This also illustrates the notion that many folks aren’t counted in the continuing claims category anymore, not because they found a job, but because they’re no longer qualified for their initial 26 weeks of benefits, Peter Boockvar writes at The Big Picture. “So the trend continues, a slowdown in the pace of firing but a reluctance on the part of businesses to hire,” he adds.
