Nice numbers this week, getting closer to the historical range of 300,000-325,000:
I'm not really sure how to interpret this number. We saw the unemployment numbers for January somewhat skewed by the labor force participation rate dropping to a pretty significant level. This number reflects how many people filed for unemployment benefits for the first time. So while the lower number is nice to see, it might also indicate that there is no one left to cut from struggling companies.
Look at it this way. Say my Company has 100 people when the recession began. Over the last few years, I reduced my force by 10 here, 20 there, etc. I'm now operating at a skeleton staffing level of 10 employees from the original 100. On the surface, things look good because I haven't eliminated any positions for a month or two. But the reality is there is no one else I can let go, and still service the customers I have today.
So yes, the number today looks great, but when taken in context with other employment data, it may be a false positive. As I say each week, stay tuned. I'm looking at this week's number with guarded optimism.
