Jobless Claims Spike—Is the Labor Recovery Cooling?
There are three ways to read the news that jobless claims shot up: (1) This proves the economy is slowing down again; (2) This proves the economy is getting stronger, so more formerly-discouraged people have decided to look for work; (3) This proves nothing, because it's just a tablespoon of data in an ocean of statistics, and we should all calm down -- and least until tomorrow's jobs report explains everything about the economy.
Heightening the anticipation for Friday's official report on the unemployment rate, the weekly figure for those claiming jobless benefits for the first time rose by 8,000 on Thursday -- its highest rate in five weeks -- even though a private estimate on Wednesday suggested the U.S. added 216,000 jobs. The unexpectedly high jobless report on Thursday showed 362,000 people had applied for benefits, up from 354,000 the previous week.
The four-week moving average, which is considered a more stable number, stayed at a four-year low of 355,000. Adding to the uncertainty about Friday's figure, a just-released Gallup poll predicted February unemployment would rise slightly over January. Still, as the Associated Press always likes to remind us, "When applications fall below 375,000, that generally signals hiring is strong enough to reduce the unemployment rate." And hiring has increased by an average of 200,000 jobs per month since November.
Read the full story at The Atlantic Wire.