Economist: Labor Market Will Gain Momentum This Year
Initial applications for unemployment benefits seem to have been slightly volatile since the beginning of the year. In each of the past seven weeks, jobless claims have reversed course with regularity. Data released by the Department of Labor’s Bureau of Labor Statistics Thursday showed jobless claims declined 3,000 to 336,000 in the week ended February 15, only slightly offsetting the 8,000-claim increase posted in the previous week. While analysts projected a slightly larger drop to 335,000 new claims and claim figures have generally been volatile, the numbers still suggest that firings remain muted. As cold weather has slowed many industries, from manufacturing to housing, employers may be holding off on increasing their workforces, but the frigid temperatures have yet to spur mass layoffs.
Continuing claims have been elevated in recent weeks, rising 37,000 to 2.981 million in the week ended February 8.
Jobless claims may be currently trending just above pre-recession levels, but “firing is still at very low levels,” 4cast senior economist Sean Incremona told Bloomberg before the claims numbers were released. Last week, the total number of claims remained at a level consistent with moderate labor market growth. Economists say any claims figure below 350,000 indicate moderate job creation. But it is important to remember that employment growth in January was far less than expected and far less than is needed to significantly reduce the high level of unemployment. Earlier this month, the Employment Situation Report showed U.S. employers added only 113,000 jobs to payrolls in January, and that weakness in the labor market provided cause for concern.