Reuters is reporting today that U. S. weekly jobless claims have recorded their biggest drop in two years.
The article reports:
Initial claims for state unemployment benefits declined 25,000 to a seasonally adjusted 234,000 for the week ended April 1, the Labor Department said on Thursday. The drop was the largest since the week ending April 25, 2015.
The prior week’s data was revised to show 1,000 more applications received than previously reported.
Claims have now been below 300,000, a threshold associated with a healthy labor market for 109 straight weeks. That is the longest stretch since 1970 when the labor market was smaller.
The labor market is currently near full employment.
Economists polled by Reuters had forecast first-time applications for jobless benefits falling to 250,000 last week.
A Labor Department analyst said there were no special factors influencing last week’s claims data. Claims for Louisiana were estimated.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 4,500 to 250,000 last week.
The article reminds us that last week’s data will have no impact on the March unemployment report due out on Friday.
The article further reports:
According to a Reuters survey of economists, nonfarm payrolls likely increased by 180,000 jobs last month after rising 235,000 in February. The unemployment rate is seen steady at 4.7 percent.
Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid decreased 24,000 to 2.03 million in the week ended March 25. The four-week moving average of the so-called continuing claims fell 7,750 to 2.02 million, the lowest level since 2000.
This is good news. The number to watch in the report coming out tomorrow will be the Labor Force Participation Rate. If the unemployment rate stays low as more people enter the workforce, then we are on our way to an actual recovery. The unemployment number was kept artificially low during the Obama Administration by not counting people who had given up looking for work. As those people begin to look for work, it is quite possible that the unemployment number will rise slightly. In order to get a true picture of what is actually happening to employment in America, you need to look at both the unemployment rate and the Labor Force Participation Rate. The unemployment rate needs to be low and the Labor Force Participation Rate needs to be high. I will be posting both of those numbers as soon as I get them.