Today's weekly update on new unemployment filings is a fresh reminder that it's hard to be a pessimist on the US labor market these days. Jobless claims fell a healthy 14,000 last week to a seasonally adjusted 298,000-close to last month's post-recession low of 279,000. More importantly, the longer-term trend continues to look encouraging. Although the short-term volatility for this series can be confusing, the big-picture view is quite clear: layoffs are winding lower. That's been true for some time and today's releases offers another dose of the same.
As you can see in the chart below, the four-week average (dotted red line) has recently tested new post-recession lows below the 300,000 mark. Although today's release shows the four-week average rising a bit to just over 300k, the downward trajectory in recent history remains intact.
An even stronger metric is the bullish signal in the year-over-year percentage change for weekly claims. New filings on an annual basis, with a rare exception, have been consistently falling for several years and the latest update sticks firmly to that trend. Indeed, claims fell a solid 11.8% last week vs. the year-earlier level. That's a strong clue for thinking that the labor market will continue to deliver moderate growth, if not something better.
In fact, that's been the message in nonfarm payrolls for several months as well. Private-sector job creation continues to rise at roughly a 2% annual pace through July and today's claims report implies that the trend will hold in the August report on payrolls that's scheduled for release on September 5.
Meantime, positive momentum overall is still alive and well across a range of economic and financial indicators, as yesterday's update on the US Economic Profile reminds. There's still plenty to worry about, particularly when you look around the world. Geopolitical risk remains a potential threat (primarily due to the Middle East and the Ukraine crisis) and Europe's struggling economy seems to be weakening once again. But when it comes to analyzing the current lineup of US macro data in the here and now, the numbers look bullish.