The Dow Industrials continue yesterday’s afternoon rally, rising 66 points to 11,112 after initial jobless claims filed last week came in just a hair above expectations in this morning’s Department of Labor report, at 448,000, down 11%, from the prior week, but above the 447,000 expected.
Our friends at RDQ Economics note the still-elevated claims number “doesn’t corroborate the improvement in April labor market conditions indicated by regional manufacturing employment indexes, consumers� perceptions of the jobs market, or the ASA staffing index.”
But it does feel about right for a market using productivity as long as it can to avoid the cost of hiring.
David Rosenberg with Gluskin Sheff this morning offers new evidence why he says many jobs are not coming back, and why labor prices are not going up:
We just heard from the National Association of Manufacturers that fewer than 30% of the manufacturing jobs lost in the sector will be recouped in the next six years. So here�s a bit of math: if this holds true for the economy as a whole, and assuming a normal cyclical upturn in the labour force participation rate, then the nationwide unemployment rate would be 15% in six years� time. How anyone can believe that we can squeeze inflation out of that scenario is truly one of life�s many mysteries.
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