Karl Smith parses this week's jobs report:

No clear drop off but stabilization. My working theory is that this change represents the dominance of service jobs for which layoffs are a much more permanent affair. In a factory setting workers may simply be sent home for a few weeks while the plant works off inventory and then recalled. As soon as the overall inventory glut in the economy is worked off factories will stop these plant shutdowns and the new claims will collapse. For a service economy a new claim represents a worker who really was let go. That decision didn’t come ways for management and was a long time in the making. It will take a while before we work through all of the layoffs that were planned back in January and February.

Free Exchange explains the macroeconomic implications of this slow recovery.

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