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

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: […]