Monthly payrolls growth remains well above 200 000 and the unemployment rate is hovering around the Fed’s full employment rate target. The number of Americans filing for unemployment benefits unexpectedly fell last week, hitting its lowest level since 1973, suggesting the labor market continued to gain momentum despite weak economic growth.
“We view claims as a valuable indicator. Although they can move erratically on a week-to-week basis, they are among the most reliable statistics when a trend becomes apparent. If the economy were starting to falter, claims would most likely be inching upward rather than moving to new lows.” said Daiwa Capital Markets in a report.
The downtrend in the participation rate seems to have turned which is an important development which has started since the end of last year. After dipping to 62.4% in Sept 2015, after a four‐month uptrend it is now at 63%. Also, the broader U6 unemployment rate hovered broadly sideways in the last few months, but is expected to resume its downward trend soon.
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