By Karl Smith
Two quick things.
One is that – actually amazingly – the absolute change year-over-year in initial claims is following steady channel. You usually see the pace of decline, itself decline over time but that is not happening.
This to me suggests that nothing special has happened in the labor market since the summer of 2011 and that its essentially steady as she goes.
As stated before, I have expected to see the economy “kick” by March or April of this year but as things look it will be late. The pressures do still seem to be building, as I’ll talk about in another post.
The other quick note is that while Initial Claims tells us a whole lot about the labor market what they don’t actually tell us that much about are layoffs, which people sometimes mistake. You can file an initial claim if you are laid off but whether or not you do so, is dependent on the state of the job market. That’s why initial claims are actually a better indicator than layoffs themselves which are back down to the lows of the previous recovery.