Does A Drop In Jobless Claims Really Reflect An Improving Labor Market?

Category: Markets / Finance / Mar 22, 2013 3:02PM EDT
Wall Street suffered its biggest loss in nearly a month on Thursday after increasing fears over a banking crisis in Cyprus, as well as weak euro-zone economic data disappointment investors. Although initial jobless claims in the U.S. rose to 336,000, from an upwardly revised 334,000 the previous week, the Labor Department said Thursday that a four-week moving average showed initial claims are at their lowest level in five years. According to the Department of Labor, the number of Americans designated as “not in the labor force” reached a record high in February at 89,304,000, up from 89,008,000 in January, CNS News reported. Americans not in the labor force are defined by the Bureau of Labor Statistics as those who are unemployed and no longer looking for work, including those who retired on schedule or retired early. The unemployment rate in the U.S. decreased to 7.7 percent in February from 7.9 percent in January. Other data Thursday showed a pickup in manufacturing growth for March as Markit's Flash U.S. Manufacturing Purchasing Managers Index rose to 54.9 this month from 54.3. In addition, existing home sales increased 0.8 percent to an annual rate of 4.98 million units last month, the highest level since November 2009, the National Association of Realtors said on Thursday. Separate data showed HSBC's flash China PMI rebounded to 51.7 in March after dropping to a four month low of 50.4 last month.