How does a one week drop in jobless claims indicate hope for the job market?
I am not sure. Job creation is still running below the level of new market participants. Consumer demand, which drives 70% of the economy, is stagnant. There are other valid reasons why the initial jobless claims number is dropping.
First, this number has become less reliable during the Great Recession and is constantly being tweaked. The writer glosses over this explanation, because the labor department source told him so.
Second, when we are attempting to measure economic trends, one month is not a sufficient sample size to extrapolate movement.
I will have labor market “hope” once the yearly moving average of claims is decreasing at a rapid clip.