MacroScope

Jobless claims fell unexpectedly last week to 361,000. Analysts were particularly heartened by the improvement because the latest figures were finally “clean” of recent seasonal adjustment quirks related to auto factory shutdowns. That’s the good news.

Some lingering cause for hesitation: Eric Green at TD Securities reminds us that recent dips in claims have not necessarily translated into great bursts of new job creation.

Over past periods of this recovery claims at this level have been consistent with (monthly) job growth closer to 200,000. With claims back at these levels, one cannot presume that this will continue to hold given the level of uncertainty and slower growth momentum from which labor demand will lag.

The next employment report is not accelerating toward 200,000. A slowdown toward 120,000 is far more likely given the recent readings on PMI’s, Monster (online) advertising, and a sectoral breakdown which favors less job growth in leisure, business services, and information technology.

The economy created 163,000 jobs in July, much stronger than analysts had forecast. But the jobless rate climbed to 8.3 percent from 8.2 percent.