It was just on Wednesday, right after the dovish statement from the Federal Open Market Committee (FOMC) on interest rates ahead, that the economic watchers and investors (and job seekers) started to perhaps worry about the endless recovery of the U.S. jobs market. Well, not so fast.
The U.S. Department of Labor has released its weekly jobless claims for the past week, and we finally saw a drop. The trend of late had been that claims were rising, and rising nearly to the 300,000 mark again.
Jobless claims were 278,000 a week ago. The prior week’s jobless claims report was revised up to 294,000 from a preliminary 293,000. Bloomberg was calling for the report to be 285,000, and the Econoday range of estimates was 281,000 to 290,000.
Another view may not jive with an all-clear sign. This is the continuing claims, what we call the army of the unemployed. It is also reported with a one-week lag. That report showed a large gain of 49,000 in the January 16 week up to 2.268 million. What stands out here, even with a one-week lag, is that it was the highest reading going back to last summer.
Another consideration was that the weekly report was holiday week, which can always skew the data. That and the rise in continuing claims adds more questions than answers to how strong the jobs market is looking in 2016.
Now, let’s think about what the Federal Reserve’s dovish FOMC statement said right up front about the labor market:
Information received since the Federal Open Market Committee met in December suggests that labor market conditions improved further even as economic growth slowed late last year. Household spending and business fixed investment have been increasing at moderate rates in recent months, and the housing sector has improved further; however, net exports have been soft and inventory investment slowed. A range of recent labor market indicators, including strong job gains, points to some additional decline in underutilization of labor resources.
It will be another week before we get to see the nonfarm payrolls and unemployment report from the Bureau of Labor Statistics. Stay tuned.
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