“It’s a bit of a broken record (for those that recall what that means), but with initial jobless claims well below 300,000 for over three years, the persistently low level of layoffs is a very positive sign for the current strength of the labor economy. It should come as no surprise that consumer confidence remains very, very high in a jobs market like this.”
Initial claims for Americans applying for first-time unemployment insurance dipped to 233,000 for the week ended April 7, a result in line with expectations of 230,000 – 235,000. The four-week moving average edged modestly higher to 230,000 from a prior level of 228,250, but still close to its 40-year low mark.
Given the frequency of the jobless claims data, the weekly tally bounces around a bit. Nonetheless, claims remain far below 300,000, a threshold generally associated with a healthy labor market and supportive of continued gains in payrolls.
This morning’s release also marks the 162nd consecutive week that jobless claims have come in below 300,000, which is the longest such streak since 1970 when the labor market was considerably smaller. When taken with the near record-low unemployment and solid trend job creation, it paints a positive picture for the labor economy – one in which employers are intent on retaining talent in an environment in which it is becoming much more difficult to find and attract qualified candidates to fill open positions.
The mismatch between the skills that unemployed individuals have and those that potential employers need remains evident in the growing number of job openings that are becoming harder to fill. As a result, the competition for labor is intensifying – a dynamic that will continue to tip the balance in favor of workers who can command a higher wage for their skills. As a variety of inflation measures edge higher, various gauges of compensation are also rising.
With many of the key labor market indicators remaining tight versus their historical averages, jobless claims included, the jobs market appears to be on a strong footing for continued growth in the near-term. While it is not the only factor that will weigh into the Fed’s future decisions on monetary policy, it will be a significant one.
Past performance does not guarantee future results. All investments include risk and have the potential for loss as well as gain.
Data sources for peer group comparisons, returns, and standard statistical data are provided by the sources referenced and are based on data obtained from recognized statistical services or other sources believed to be reliable. However, some or all information has not been verified prior to the analysis, and we do not make any representations as to its accuracy or completeness. Any analysis non-factual in nature constitutes only current opinions, which are subject to change. Benchmarks or indices are included for information purposes only to reflect the current market environment; no index is a directly tradable investment. There may be instances when consultant opinions regarding any fundamental or quantitative analysis may not agree.
Plante Moran Financial Advisors (PMFA) publishes this update to convey general information about market conditions and not for the purpose of providing investment advice. Investment in any of the companies or sectors mentioned herein may not be appropriate for you. You should consult a representative from PMFA for investment advice regarding your own situation.