Jobless claims continue to sharply decline, reaching 368,000 for the week ended February 26. Simultaneous with this report, the Department of Labor also revised the previous weekly result lower.
The 4-week moving average, which effectively smooths out an otherwise volatile data series, also dipped to 388,500, its lowest point since July 2008.
Continuing claims also continue to slide, reaching a point nearly 1 million lower than one year prior on a seasonally adjusted basis, confirming the longer term trend.
There can be no denial that a strengthening in labor market conditions is underway, as layoffs have dropped sharply since the beginning of the year. Coupled with increasing consumer demand, this should translate to a faster pace of job creation in time.
Productivity gains of 2.6% for the fourth quarter helped employers meet increasing demand without a more significant expansion of their workforce. Should the economy gather further steam and future demand outpace productivity gains, one would expect to see hiring ramp up at a faster pace.
The recent ADP survey that reported companies added 217,000 jobs last month was also a positive sign. The combination of these recent labor market related reports sets us up for an interesting employment situation report tomorrow and improves expectations for that report.
The table is being set for greater job creation; the lingering question is when the dinner party will actually begin.
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