Weekly jobless claims data showed another positive surprise regarding the US labor market. According to analysts at Wells Fargo, the numbers adds to the evidence that labor market’s recovery is getting back on track. They consider that on Friday, Nonfarm Payrolls will likely further suggest that the worst of the winter slowdown is already behind.
“New filings for unemployment insurance fell for a third straight week at the end of January, dropping 33K to 779K. As we move further away from the volatility surrounding the end-of-year holidays, the trend is becoming clearer: the pace of layoffs is easing once again.”
“The decline in new claims in recent weeks adds to the evidence that the worst months for the labor market could very well be behind us. Hiring picked up more than expected in January according to the ISM surveys and ADP reports, while job postings according to Opportunity Insights also turned higher in January.”
“Tomorrow’s employment report is likely to show that the labor market remains in a delicate position. We expect to see job growth of around 60K in January. That barely puts a dent in the 9.84M job deficit since February. However, considering the backdrop of the weeks leading up to the survey—record hospitalizations, ongoing restrictions and uncertainty that another major relief package would make it across the finish line—a resumption in hiring would show the recovery is getting back on track.”