One of The Wealth Strategy Groups Seven Signs of a Changing Economy is JOBS! This is a key sign of economic change as it tells us a great deal about the economy in two quick observations. 1) if jobs are expanding it is because businesses are growing, i.e. selling more stuff. 2) that consumers are spending more. If they weren't businesses would not be growing and hiring new workers.
The reduction in new claims for unemployment suggests a flicker of growth here. It is only for the week and we really need to see this number trend down over the four week average claims number, and for an extended period before it has any impact, but it is a flicker. We will watch this to see if there is a trend developing.
I would suggest this is not a trend. Why? The "Birth/Death" calculation portion of this jobs report! As long time readers know, this is not the birth or death of people, but instead, of businesses created versus closed. As it turns out this number is just a guess by the stat trackers. It does get adjusted to a more accurate representation once a year, but as a rule is generally released high for obvious reasons. Example: For 2010 the new jobs created stat was reduced by over 1,000,000 jobs!
The key is this; if not for the Birth/Death adjustment in the jobs creation calculation, there would have been a jobs contraction versus the growth reported. The world equity markets loved the news, but I would suggest caution is warranted and a trend is not yet in place.
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