Jobless claims show worsening U.S. labor market. Or do they?

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The U.S. labor market is not quite as strong as it looks, if the latest jobless-claims figures are to be believed. But how believable are they?

The government on Thursday unveiled a new formula for seasonal adjustments that shows initial jobless claims, or layoffs, were notably higher this year than previously reported.The government on Thursday unveiled a new formula for seasonal adjustments that shows initial jobless claims, or layoffs, were notably higher this year than previously reported.What the new numbers show is that jobless claims have topped 200,000 for nine straight weeks, including a 14-month high of 247,000 in mid-March.

“This rise is more consistent with the large number of layoffs announced by high profile tech and retail companies since the beginning of this year,” said Stuart Hoffman, senior economic advisor at PNC Financial Services.“The data still indicate that the job market is strong and that laid-off workers are having a fairly easy time finding new employment,” said Matthew Martin, U.S. economist at Oxford Economics.

The latest monthly jobs report for March is due Friday. Wall Street expects another strong increase of 238,000. Adding to the problem, the pandemic in 2020 and 2021 threw the seasonal-adjustment process out of whack because of huge and sudden changes in employment. The government has been fine tuning its process ever since to try to make it more reliable again.

 

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I blame McCarthy and his fellow travelers

They do.

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Source: WSJ - 🏆 98. / 63 Read more »