Ahead of tomorrow’s economic extravaganza known as the monthly labor report comes word that jobless claims fell from an upwardly revised 357,000 to 346,000 for the week ending June 1st, but the smoothed, four-week average rose for the third straight week.
Gallup reported U.S. Job Creation Best in Five Years, but the folks at CNN/Money take the opposite view in Hiring at small businesses tapers off, so it’s hard to know what to expect tomorrow. Former White House economic adviser Edward Lazear has some thoughts on the subject in this WSJ story today in which the following graphic is provided.
The demographics of retiring baby boomers are certainly a big factor in the employment-population ratio above, but, with each passing month, the traditional jobless rate seems less relevant. This is the point made by Lazear, one of the key reasons being that each time the unemployment rate changes, you have to look at whether people left the labor force because they’ve given up looking for work or if more people actually found jobs.
Combined with the dearth of well-paying jobs that has seen real per capita income stagnate for many years, this is yet another example of how old metrics are losing their value in the current economy, as is the case for financial markets.
Source: Iacono Research
