Initial Jobless Claims Plunge To 42 Year Lows, Despite Surging Job Cuts | Zero Hedge

Initial Jobless Claims Plunge To 42 Year Lows, Despite Surging Job Cuts | Zero Hedge: "Exhibit 3 shows our calculated breakeven rate for jobless claims, which we derived using data from the monthly JOLTS reports through July (we smoothed the breakeven rate for the purposes of this graph). Over the last few years, the breakeven level of jobless claims has steadily declined, reflecting an increase in job market separations (including quits) and a lower benefit take up rate. These trends were partly offset by an increase in gross hires. While it’s encouraging that unemployment insurance claims remain very low, they are not a sufficient indicator of labor market conditions. And at the moment, the raw level likely overstates the underlying pace of job growth. The gap between claims and their estimated breakeven rate—likely a better indicator of job market health than claims alone—points to payroll growth of about 160-200k per month, or only slightly above the run rate over the last two months."



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