The number of new filings for unemployment benefits in the US fell last week, delivering another encouraging round of numbers for the economy, according to this morning’s release from the US Labor Dept. The news follows upbeat data for the labor market overall in August. Considering all the numbers to date reaffirms the view that business cycle risk remains low.
Claims dropped 7,000 to a seasonally adjusted 275,000 for the week through Sep. 5. That’s close to the four-decade low of 255,000 that was briefly touched in mid-July.
Considering today’s update in context with recent history, it’s clear that the downtrend remains intact for this leading indicator. The year-over-year change for claims posted an 11% slide last week, which is in line with the pace of decline over the last several weeks. The ongoing slide suggests that the labor market is still poised for growth.
As such, today’s release offers little support for arguing that the economy is deteriorating. The sharp jump in market volatility in recent weeks may suggest otherwise. But dark signals in the macro trend remain a speculative concept that’s yet to find clear support in the hard economic data for the US.
“We’re making progress,” Ryan Sweet, a senior economist at Moody’s Analytics, tells Bloomberg. “The job market is in good shape. Sub-300,000 initial claims is historically rare but the norm this year.”