May 6, 2004

YEAH, BUT, WHAT ABOUT OIL PRICES?

Jobless Claims Hit 2000 Low (Alister Bull, 5/6/2004, Reuters)

America's employment outlook brightened on Thursday after the government said jobless claims dropped last week to their lowest since 2000, bolstering expectations for strong numbers in the April jobs report.

[...] The picture of a better jobs climate was also backed by an unexpected increase in unit labor costs in the first quarter, alongside respectable productivity growth of 3.5 percent.

First-time claims for state unemployment benefits shrank 25,000 to 315,000 in the week ended May 1, the Labor Department said. It was the third straight week of declines.

More bad news for the "Worst economy in...." crowd. Better get the next fiddle out of the case and blame high oil prices on Bush. Meanwhile, productivity gains continue with extremely small unit labor cost correlation. Increasingly profitable corporations tend hire more employees and pay more taxes - what a concept.

Posted by John Resnick at May 6, 2004 3:01 PM
Comments

Employment report tomorrow could be good news for Bush. If the job growth continues to be strong (+100K a month) the Dems will have to shift from jobs lost back to the unemployment rate as their rallying cry.
Part of the problem for Bush I in '92 was that the economic stats showed improvement but the people didn't feel it yet. 5 or 6 more months of solid economic growth and the people should be feeling it.

Posted by: AWW at May 6, 2004 3:24 PM

Stock markets don't agree with you today. It is a bad sign when the markets sell off on good news. Inflation is on the way.

Posted by: Robert Duquette at May 6, 2004 4:54 PM

If they turn to oil prices, won't they have to admit that their stalling on oil policy legislation didn't exactly help matters?

Posted by: kevin whited at May 6, 2004 5:00 PM

Robert: It's not necessarily a 'bad sign' when markets sell off on good news - or otherwise. It's simply what the markets routinely do. Stock markets reflect liquidity (dollars chasing shares & vice versa). Corporate selling in the 1Q04 was at record pace, new offerings at the now-favorable multiples are soaking up willing buyers' dollars and the flap over potential interest rate hikes because of inflationary concerns makes a good headline. But Bull markets run quite nicely in an inflationary environment.

Kevin: "...have to admit..."? Sure, that'll be the day.

Posted by: John Resnick at May 6, 2004 5:16 PM
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