Initial Claims Up – Time to Worry?

From Bloomberg:

Jobless claims fell by 2,000 to 386,000 in the week ended April 14 from a revised 388,000 the prior period that was higher than initially estimated, Labor Department figures showed today in Washington. The median forecast of 47 economists surveyed by Bloomberg News called for a drop to 370,000. Revisions to previous data have been larger than normal and the government is trying to determine the cause, a Labor Department spokesman said as the figures were released to the press.

Recent softness is pulling the 4-week moving average higher:

Cause for concern?  Given the history of this series, I have trouble see the recent increase as anything but consistent with the normal behavior of claims:

While I would like to see a steady, consistent decline to something closer to 300k, that was never really in the cards.  I would become more concerned if claims backed up as they did in the beginning of last year, but that is not yet the case.

That said, arguably we are seeing further evidence that job growth will continue to fall short of what many would like to see, which I think is something closer to 300k/per month rather than the 210k average of the last three months.  Indeed, we could be seeing the impact of slowing productivity growth – absent a more rapid pace of final demand growth to boost sales and profits, firms are turning to labor to save costs.  In short, slow and steady continues to be the rule – also from Bloomberg:

“Progress in the labor market is not quite as strong as people had hoped, but we are still on a recovery track here,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida.

That sounds about right.

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