Job growth accelerated in October to 151,000, largely in the private sector. That's always good news. Still, the unemployment rate remained at 9.6%. This is the third month in a row showing some growth and slowly evolving strength. Of course, the stock market, as usual, is ahead of jobs growth.
But once more, how do you make sense of the jobs growth and unemployment claims? The 4-week moving average was 456,000, an increase of 2,000 from the previous week's revised average of 454,000. With those figures, it's obvious that the jobs growth is not good enough.
Mark Zandi, who, aside from Larry Summers (I know some of you don't trust Summers, but in a study of accurate predictions by economists, Zandi and Summers continually lead the pack) tends to be the most the most astute and trustworthy economist today. He understands that jobs are the biggest issue to most people. So once more here's the interpretation of unemployment claims for filing away in your gray matter.
Zandi says that the most accurate and timely barometer of jobs and the economy is initial claims for unemployment insurance, a figure that's released every Thursday morning by the Labor Department. You can get the information from the labor department here. This indicator measures the number of people who go to unemployment offices and announce that they are out of work.
According to Zandi, here's how to make sense of the numbers. Only when claims head down to 400,000 will the economy be creating enough jobs to maintain stable unemployment. Closer to 350,000 will lower the unemployment rate and mean that the recovery is evolving into an expansion. When we get to initial weekly unemployment claims of 300,000, boom times are back.
All of this is to say that it's the economy, stupid!
