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Today’s miserable GDP report (only 0.5% GDP growth in Q1) doesn’t seem consistent with the banner headline “U.S. Jobless Claims Hover Near Lowest Level in Four Decades.”
(Bloomberg) — Jobless claims last week hovered around four-decade lows, showing the labor market remains the strongest part of the U.S. economy.
Initial applications for unemployment benefits climbed by 9,000 to 257,000 in the week ended April 23, a report from the Labor Department showed Thursday in Washington. The prior week’s revised 248,000 claims were the fewest since 1973.
The low level of firings indicates companies are optimistic about prospects for demand after a soft first quarter. Continued progress in the labor market that’s accompanied by accelerating wage growth will be needed to help prop up consumer spending, which accounts for 70 percent of the economy.
True, wage growth is kind of accelerating, but the U-6 underemployment rate is still higher than it was in 2008. While real median household income is lower than it was in 2007.
And average weekly earnings growth is barely above the almost non-existent rate of inflation.
Say, you may be able to buy this $443K house near Orlando Florida that was valued at $2.7 million in 2006. But not at 1.1% YoY weekly wage growth.
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