Here, from Bloomberg, is the lowdown on yesterday's report on initial unemployment claims for the week ending on Christmas:
The number of Americans filing initial unemployment claims unexpectedly fell last week to 326,000, evidence the job market may be strengthening heading into the New Year.
Initial jobless claims dropped 5,000 in the week that ended Dec. 25 from 331,000 a week earlier, the Labor Department said today in Washington. Claims have averaged 343,000 a week this year compared with 402,000 in 2003.
The economy probably created 175,000 jobs in December following a lower-than-expected gain of 112,000 in November, based on the median economist estimate ahead of next week's Labor Department report.
The article recalls a report earlier this month reinforcing a view that the jobs picture continues to improve.
The outlook for hiring in the first three months of 2005 has improved from the same period last year, according to survey by Manpower Inc., the world's No. 2 supplier of temporary staff by revenue. Twenty-four percent of the 16,000 employers polled intend to increase their staffs from January through March, compared with 20 percent in the first quarter of 2004, the report, issued earlier this month, showed.
If you are inclined to be a contrarian, you might appeal to yesterday's release of the Help-Wanted Index for November from the Conference Board.
The Conference Board’s Help-Wanted Advertising Index – a key barometer of America's job market – dipped one point in November. The Index now stands at 36. It was 38 one year ago.
In the last three months, help-wanted advertising declined in six of the nine regions across the U.S. Largest declines occurred in the East North Central (-7.5%) and Mountain (-7.2%) regions. Help-wanted advertising increased in the Pacific (3.4%), East South Central (1.2%) and Middle Atlantic (0.8%) regions.
Says Conference Board Economist Ken Goldstein: “Job growth continues to be sluggish, despite periodic reports that some companies are planning to add workers in the months ahead,” says Conference Board Economist Ken Goldstein, a specialist in the labor markets. “This is reflected in the Conference Board’s Leading Economic Index, which has declined in five of the last six months, and by dips in consumer confidence. The widely-awaited turnaround in job growth has yet to arrive.”
Well, maybe. As suggested by the latest data here and here, the "dips in consumer confidence" are not so obvious. And the help-wanted index is itself is a somewhat controversial indicator. But since I'm trying to help out the pessimists, a sympathetic overview can be found in this Slate article, by Daniel Gross.
There's an inverse relationship between unemployment and job vacancies, known as the Beveridge Curve, after the British economist who described it. The curve thus predicts that periods of comparatively low-volume advertising would coincide with high unemployment, and periods of comparatively high-volume advertising would coincide with low unemployment. (This paper has a good description and representation of the Beveridge Curve.)
The Help-Wanted Index shows that's pretty much been the case. The index fell from 100 in 1987 to the low 60s in 1991 and 1992—the depths of the last recession and jobless recovery—and then rose throughout the mid-1990s as payrolls swelled. But in the late 1990s, the neat Beveridge Curve began to get sloppy...
The Help-Wanted Index may have lost its utility as an absolute gauge. The number of help-wanted ads in newspapers has declined, so it will be hard to reach the '87 figure even in good times. But as a relative barometer, it remains as valuable as ever. When help-wanted ads rise, it takes a few weeks for people to respond, have interviews, and then get hired. That makes it one of the best leading indicators of employment we've got. Until the Help-Wanted Index perks up, don't expect payrolls to grow.
I'm skeptical, but I guess we'll see.