Jobless claims dipped 6,000 during the week ended October 15 to 403,000, technically an improvement, but one that is insufficient to alter the prevailing trend.
It will be virtually impossible for the jobless picture to improve meaningfully with employers bleeding jobs at this pace.
As with any number of specific indicators of the strength of the jobs market and broad economy, weekly claims stuck in the 400,000 range are suggestive of an economy that is not thriving, but isn’t rapidly deteriorating either.
Given the increasingly pessimistic outlook for the economy, employers are unlikely to be emboldened at this point to invest in expanding their workforce.
Economists often speak of a vicious cycle or virtuous cycle taking hold. Today, the economy and jobs market both still appear stuck in a mediocre cycle, with low consumer confidence and negative trends in personal income and spending all contributing to the risk of a more pronounced downturn.