The US labor market appears to about as strong as it has ever been as the number of Americans filing for first time unemployment benefits plunged to 190k (well below the 214k expectation) – its lowest level since April 2022…
The non-seasonally-adjusted level of initial claims also reversed lower.
Want to know what drove this unusual drop in claims? Simple – New York saw jobless collapse – a massive outlier…
This has to be storm-related in some way.
Continuing jobless claims rose last week, up from 1.63mm to 1.647mm…
This is very much not the picture that Jay Powell is hoping to see… At the start of last year, monetary policy transmission was working – jobless claims were rising as financial conditions tightened… then it all broke!
And now… Financial conditions easing and the labor market tightening.
Does that sound like a time for a ‘pause’?