New filings for jobless benefits jumped by 18,000 to 409,000 on a seasonally adjusted basis in the final week of 2010, according to this morning’s Labor Department update. That’s a bit of a disappointment after last week’s news that initial claims dipped below 400,000 for first time since the summer of 2008. But it’s hardly time to throw in the towel on expecting better days ahead for the labor market.

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Predictions for 2011 by BlackRock’s Bob Doll
● U.S. stocks will record 3rd straight year of double-digit gains
● US Real GDP Will Hit All Time High in ’11, Marking Economy’s Transition from Recovery to Expansion
“Our expected gains for the equity markets for 2011 are not much different from what we expected for 2010,” he said. “What’s different for 2011 is that market risk will be more to the upside than was the case in 2010.”
The possible upside factors include an acceleration in jobs gains, a surprise in real GDP, earnings exceeding expectations as occurred in 2010, and Washington D.C. beginning to address the nation’s fundamental debt and budget problems. On the other hand, Doll’s “what can go wrong?” list includes the possibility of credit problems resurfacing (including US housing, sovereign nations, and state and local governments), commodities price increases causing profit margin pressure, inflation fears, a greater than expected rise in interest rates, undue emerging markets tightening to curb asset bubbles, and
currency and capital flow concerns leading to protectionist trade wars.
Blackrock, Jan 5
US Economic and Interest Rate Outlook, January 2011
With regard to 2010 real GDP growth, we now expect Q4/Q4 growth of 2.9% vs. 2.3% in the November forecast Based on Q4 forecast. 2010 available data, real GDP appears to be coming in at an annual rate of 3.6% rather than the 1.9% we were projecting in November. In addition, the Commerce Department revised up Q3:2010 real GDP growth from 2.0% to 2.6%.
Northern Trust, January 2011

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