Initial jobless claims dropped to 442,000 for the week ended March 20, a result that slightly better than expected while extending the trend of declining weekly claims to a fourth consecutive week. The four-week moving average also declined substantially to 457,250 from 471,250 last week.
Companies are cutting fewer jobs as sales improve, but that’s the glass half full view. We are still not seeing the degree of job creation that is needed to meaningfully chip away at a persistently high unemployment rate near 10%.
CEO confidence remains well below pre-recession averages; that high degree of skepticism about this recovery continues to restrain a ramp up in hiring.
The economy is still in that point of the cycle in which employers are content to address increasing demand through productivity gains and better utilization of current resources. They will add workers when they have little ability to meet increasing demand through other means, and not before they are confident in the need to do so. Given the current trajectory of the economy, it should happen in the quarters ahead; we are just not there yet.