The one thing the Federal Reserve keeps pointing to as its justification for normalizing interest rates is the improvement in the jobs market and especially the declining unemployment rate. Readers will be familiar with the fact that I am sceptical of the data. But leaving that issue aside, it looks like the data may be heading down.
Weekly initial jobless claims are starting to rise. The last three weekly reports show a 9.1% surge in jobless claims. Here is today’s:
Released On 3/31/2016 8:30:00 AM For wk3/26, 2016
This data is important because it is used to adjust the calculation of the monthly employment report. The March report will be released tomorrow. In the past, when the trend of lower initial jobless claims has reversed, it has been a good leading indicator of a slowing economy and job market.
There is more. Challenger, Gray & Christmas, Inc. the Chicago-based global “outplacement and career transitioning firm” (they fire people for big companies) also reported today a significant jump in layoffs for the first quarter of this year. In Q1, employers announced 184,920 job cuts, up 31.8% from Q1 of 2015, the worst start to a year since 2009. The trend seems to be accelerating as Q1 2016 cuts were up 75.9% from Q4 2015 when ‘only’ 105,079 layoffs were announced.
The bad news is not confined to the oil industry. The Challenger, Gray & Christmas report says that “announcements have increased significantly” in retail and computers. Tomorrow’s much watched monthly employment report could turn out to be a big negative surprise.