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Job Market Shows ‘Resilience’ As Weekly Jobless Claims Near Historic Lows

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J.D. DURKIN: I do want to ask you about weekly jobless claims. We follow this number, especially in this cycle very closely on Thursdays. It actually fell last week, despite the surge in recent layoffs and there have been high profile layoffs. We've talked about the Lyfts  (LYFT) - Get Free Report, the Twitters  (TWTR) - Get Free Report, you know, take your pick in the world of tech or beyond. What do we take away from this figure? Even if it's not necessarily in line with expectations.

MARTIN BACCARDAX: It seems to me, J.D., we're going to have to wait a long time before we understand what's happening in the labor market. There's no question about it. But when we see a fall of 4,000 new applications and a figure of 222,000 for the weekly number, it does suggest a robust resilience in the job market that we wouldn't expect to be in place heading into the final months of the year. Certainly there's a lot of seasonal holiday hiring, which is keeping those numbers down. Certainly, as we talked about yesterday, the tech layoffs aren't nearly as significant across the whole of the U.S. economy as they are to pockets of it, even though the optics of them are poor and JOLTS data from the month of September still reminds us that there's about 11 million unfilled positions.

So it's going to take a long time, I think, for us to understand exactly what the implications for the job market were as a result of the pandemic, how they played out in the work from home and hybrid work scenarios that followed, and where we are going forward with respect to the growth metrics that we're seeing in the United States, which are a little bit confusing, it has to be said. But ultimately, we are seeing labor market resilience and to a degree that might be underpinning the messaging that we're getting from the Fed today, because, of course, if the job market remains as solid as it has, it is only going to increase the need for wage hikes in order to match the pace of inflation. And that can be self-fulfilling in the wrong direction for the Fed's inflation ambition.

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