The employment situation continues to be plagued by tepid broad economic growth.
This result reminds us again that the economy is not out of the woods, and reinforces that last week’s surprise decrease in claims was largely due to fewer seasonal manufacturing layoffs is typical rather than meaningful improvement in labor market conditions.
There are troubling signs that the growth in the manufacturing industry may be slowing, which could result in constrained hiring in the second half of this year.
The jobless rate remains stubbornly high. While there have been some positive indications of private sector job creation, we expect increases in the short term will remain muted by a cyclical slowdown in the pace of demand both in the U.S. and abroad.
Viewed together, last week’s better-than-expected result and this week’s disappointment illustrate the volatility of the weekly claims figure and reinforce the importance of taking a broader view of results over a longer period.
The four-week moving average remains stuck above 450,000, indicative of a frustratingly troubled jobs market.