Initial jobless claims have not been this low since the summer of 2008, before the credit crisis occurred and the recession intensified.
The pace of decline in initial claims has picked up in the past few months, as claims continue to edge closer to that important 400,000 mark.
The perception that little progress is being made in terms of improvement in the jobs market is certainly understandable. With the unemployment range stuck near 10% and very little in terms of net job creation, jobs are still not plentiful to those seeking employment.
The housing market is also optimistically hoping for further improvement within employment, as that is a key component impeding its recovery. Ironically, the large number of homeowners that are underwater on their mortgages actually impedes worker mobility, making geographic relocations to take a job less likely.
The market has yet to reach the symbolic tipping point at which job losses do not inhibit meaningful growth in payrolls. Nonetheless, gradual movement in that direction continues.
Consumer and business outlooks alike, we suspect, will continue to gradually brighten given the Fed’s commitment to keep interest rates low and a reprieve on higher income tax rates. All the while, the debt issues facing the economy are not just lingering, but growing. This will be another fight, but one that policymakers generally agree will be deferred to a later date.