Just a quick update today. After all, it’s Independence Day week and I’m a freelancer, so that’s double time off (without pay).
The July jobs data has a slightly unusual split thanks the Fourth of July holiday. The new unemployment numbers were released on Wednesday, a day early because Thursday is a federal holiday, while the hiring numbers will come out on Friday.
July Unemployment Numbers
The numbers released today are for new unemployment claims. In other words, these job numbers are a measure of how many people recently lost their jobs, not how many people are unemployed, or how many are being hired. Theoretically, you could have a huge first time unemployment number and a huge drop in the overall unemployment rate if a bunch of people were hired and fired over the same time period. In real life, it seldom works that way.
So, without reading too much into these employment statistics, the initial jobless claims number dropped by 5,000 to a seasonal adjusted 343,000, which is slightly less than economists were predicting, but by no means any sort of blockbuster drop. Certainly nothing here will make anyone worry about inflation.
The uptake is simply that the economy appears to still be growing just enough to allow people to keep their jobs, and for a few people to get hired. This is hardly robust economic growth, but at least the arrow is pointing in the right direction. Contrary to what the media seems to like to say, there is no reason to think that the economy has to move quickly in one direction or another. Slow growth is still growth.
The Friday numbers will likely prove to be non-dramatic as well. If we see a slight drop in unemployment, that is just further confirmation of a slow growing hiring market and overall economy. A big move in either direction would be a surprise and the markets would respond dramatically, as no one is expecting such a thing.
Have a great Fourth of July with you family, catch some fireworks, and be safe!