US: Jobless claims, another clearly improving labor data – Wells Fargo

Initial jobless claims fell more than expected last week, dropping below 500K for the first time in a year. According to analysts at Wells Fargo argue the report is other labor market data that show the labor market recovery picking up speed.

Key Quotes: 

“Nonfarm labor productivity rose at a 5.4% annualized clip in Q1, as demand roared back faster than businesses brought on workers. The surge follows the typical pattern of a recovery, but says little about the underlying trend in productivity. Meanwhile, jobless claims continued to catch up with other labor market data that have showed the jobs recovery picking up speed, dropping to 498K last week.”

“Jobless claims have fallen sharply since the start of April, bringing them more in line with other labor market data that show the jobs recovery picking up speed. We look for nonfarm payrolls to rise by 1.1 million in tomorrow's April employment report. The unemployment rate should continue to decline, but we expect it to edge down only slightly to 5.8% as the growing number of job opportunities, easing health concerns, and reopening of schools bring more workers back into the labor force.”