The Labor Department today reported 366,000 new unemployment claims. The really good news is that the four-week average is 350,500. A number like this indicates that business is maintaining the best rate of employment since early 2008. The Labor Department also indicated that 157,000 new jobs were created by business in January. While this is not great, and we are looking for something in the 350,000 to 400,000 jobs range, it is better than a year ago.
The report also noted that in the 4th quarter of 2012, Americans worked more hours but business output was flat! Non-farm productivity fell by 2% during the final quarter and labor costs jumped by 4.5%. The GDP dropped to an annualized rate of 0.1%. These are not signs of a robust economy.
The Federal Reserve is buying bonds and mortgages at the rate of $80+ billion monthly, in an attempt to stimulate the economy. Millions of people are out of work and the unemployment rate has moved back up to 7.9%. With all of this mixed news the stock market continues its surge, with the S&P 500 up about 5% in January. Overall, it would therefore appear that we are holding our own but with a feeling of trepidation!
Ed Mallon
