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Thursday, January 24, 2013

Jobless claims keep falling, hit another 5-year-low

I've been saying for awhile now that the initial weekly jobless claims numbers for the past several weeks may not have been accurately reflecting movement in the jobs market, and that we should take them with a grain of salt until late January or early February.

The aftermath of Superstorm Sandy and the holiday season skewed the numbers and may still be doing so. However, we are nearing the point where we may have to start taking them at face value, if not this week, then within the next two.

Weekly initial jobless claims fell to a low not seen since January of 2008, down to 330,000. The less volatile four-week-moving average is at about 351,000. Economists believe anything consistently below about 375,000 marks solid growth.

The numbers reported this morning, if real, would mean that the jobs market has begun to strengthen and is picking up stem from the modest growth we've been experiencing for several months. That would be welcome news. And now that there has been a return to some semblance of sanity in Washington, with the debt ceiling becoming more a symbolic than real fight, economic improvement in 2013 has a chance - a chance - to really take off.

Yes, the stock market is booming. No, it isn't a bubble.

From the piece:

But add up those days of 0.4 percent gains—there have been a lot of them in the last four years–and it is a remarkable run. Tuesday’s close left the S&P only 4.6 percent below its all-time high in October 2007, meaning it could enter record territory after just a couple more good days. We are living through the strongest stock market rally since the late 1990s–though this one has far, far more solid fundamentals underlying it.

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