Initial claims for unemployment rose to 745K last week, but the gain reflects some catch-up in filings after mid-month storms. After going nowhere the first six weeks of the year, the trend in claims is heading lower. Claims along with other data suggest tomorrow’s payrolls report will show a pickup in job growth.
Not Bad, All Things Considered
The rise in initial jobless claims to 745K last week reflects some catch-up after winter storms delayed filings in the middle of February. Not seasonally adjusted, claims rose by 32K, with Texas reporting an increase of 18K and Mississippi reporting a rise of 8K. While the President’s Day holiday has also interjected some noise to recent weeks’ figures, the four-week average dropped to the lowest level since early December. In short, initial jobless claims are finally indicating that the jobs picture is beginning to firm up again after a rough winter.
Almost Go Time
Other data suggest the jobs recovery has regained its footing. Job postings according to Indeed.com in February surpassed their pre-COVID baseline. The latest employment reading from the ISM services index gave back some ground in February, but still logged the second-highest reading since the pandemic began. At the same time, factory hiring appears to be picking up speed, and more consumers are viewing jobs as “plentiful.” With vaccinations hitting their stride and substantial fiscal support making its way through the economy, growing optimism around growth should help shift the jobs recovery into higher gear in the next few months. We look for payrolls to have increased by 210K in February, but expect a marked pickup in the spring and summer.
