Is the Fed now underestimating the labor market?

My pal Peter Boockvar’s not a fan of endless ZIRP. His thoughts on this morning’s strong jobless claims report below (emphasis mine):

Initial jobless claims for the week ended July 19th were 284k, well below expectations of 307k, down from 303k last week and the lowest print since February 2006. While the Labor Department said there was nothing unusual in the data, there are seasonal issues in July around auto plants that typically shutdown and less may have been closed this summer due to good sales. Smoothing this out, the 4 week average fell to 302k from 309k, the lowest since May 2007. Continuing Claims fell slightly but to also the lowest since 2007. Bottom line, while we can’t ignore the seasonal issues in July, the trend in claims continues lower and that is healthy for the labor market in terms of measuring firing’s. The problem though continues to be the Fed which still won’t acknowledge that zero interest rates, let alone QE, are way out of whack with the reality of the economic data. As mentioned, today’s claims figure was the lowest since February 2006. Back then, the fed funds rate was at 4.5%, only to rise to 5.25% by June 2006. This debate will really heat up after QE ends in October and the 2 yr note yield should be a main focus. At .49% today, it’s at a two week on a closing basis and just 4 bps from the highest since 2011.

In a subsequent note, Peter acknowledges the weaker-than-expected new home sales data we got for the month of June – which is clearly a counterbalance to today’s labor market news – but he points to the fact that the real estate data point carries with it a high margin of error.


Peter Boockvar
Managing Director, Chief Market Analyst
The Lindsey Group LLC

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. commented on Oct 19

    … [Trackback]

    […] Information on that Topic: […]

  2. mơ đi xe đạp đánh con gì commented on Nov 11

    … [Trackback]

    […] Info to that Topic: […]

  3. tangerine banque online commented on Nov 26

    … [Trackback]

    […] Here you will find 89755 additional Info to that Topic: […]

  4. Hire Online web Designer in Canada commented on Dec 15

    … [Trackback]

    […] There you will find 61681 more Information on that Topic: […]

  5. mơ thấy nhẫn vàng đánh con gì commented on Dec 20

    … [Trackback]

    […] Find More Info here on that Topic: […]

  6. 똥광 commented on Dec 28

    … [Trackback]

    […] Read More on that Topic: […]

  7. replica Rolex Daytona For Sale commented on Dec 31

    … [Trackback]

    […] Read More Info here on that Topic: […]

  8. royal bank commented on Jan 14

    … [Trackback]

    […] Find More Information here to that Topic: […]

  9. repliki zegarkow commented on Jan 20

    … [Trackback]

    […] Read More Information here to that Topic: […]