LIVE MARKETS-Do muted jobless claims tell the whole labor market story?

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DO MUTED JOBLESS CLAIMS TELL THE WHOLE LABOR MARKET STORY?

Investors hungry for economic data on Thursday had to make do with the Labor Department's weekly jobless claims data.

Last week, 212,000 U.S. workers joined the queue outside the unemployment office USJOB=ECI, marking an unexpected 1.9% increase from the previous week's upwardly revised 208,000 initial claims.

The number landed 3,000 shy of the 215,000 analyst estimate.

Ironing out weekly volatility, the four-week moving average of initial claims is still moving sideways, with a barely perceptible upward bias, continuing to hover in the lower part of the range associated with healthy labor market churn.

The data is yet to reflect the surge in recently announced job cuts.

As a reminder, Challenger Gray's most recent layoffs report, released on February 5, showed U.S. employers announced 108,435 job cuts in January, a year-over-year jump of 118% and 205% surge from the previous month.

"Low claims don't preclude further labor market weakness," writes Oliver Allen, senior U.S. economist at Pantheon Macroeconomics. "Most reliable indicators of hiring and job openings (are) improving by very little, if at all, in recent months."

"We think that leaves room for payroll growth to continue to undershoot the economy’s 'break-even' pace, putting renewed upward pressure on the unemployment rate."

Ongoing jobless claims USJOBN=ECI, which are reported on a one-week lag, decreased by 1.7% to 1.833 million. This metric remains elevated, particularly considering consumer survey data that suggests laid-off workers are finding it increasingly difficult to find a replacement gig.

Has that tide turned, or have an increasing number of jobless Americans seen their unemployment benefits expire?

"The net proportion of people saying jobs are hard to get in the Conference Board’s survey of consumers, a very reliable indicator in the past, points to the unemployment rate rising again soon, though unusually mild weather in early February likely prevented an immediate rebound," Allen adds.

(Stephen Culp)

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