Today’s poor weekly jobless claims result verified the choppy upward trend that we have seen since March.
The bottom line is that the jobs market, much like the economy itself, has slipped since earlier this year.
Hiring hinges on employer optimism fueled by their expectations for growth and need to add to their workforce to meet that increasing demand.
Right now, uncertainty about the sustainability and trajectory of the recovery seems to be the trump card holding employers back.
The recent productivity results for the second quarter are a promising sign for the labor market, suggesting that their ability to hold off on hiring by meeting increasing demand through productivity gains may be close to running its course.
There are some silver linings in the overall gray economic horizon which could result in marginal improvement in payrolls over the coming months, including continued expansion within the services sector and strong business investment.
High levels of unemployment have left consumers discouraged, keeping their spending in check. It’s a bit of a self-reinforcing cycle of weak demand keeping hiring in check and vice versa.