Here’s Why Consumers Aren’t Scared of Recent Jobless Claims Spike
The number of new jobless claims filed over the past week spiked to a seasonally adjusted 388,000, the U.S. Labor Department reported on Thursday. However, a separate report shows that American consumers have growing confidence in where the economy is headed.
The 46,000 increase is yet another dramatic change in what has been a roller coaster ride for jobless claims numbers in the past few weeks. Just last week, economists and consumers alike were celebrating the largest drop in new claims for state unemployment benefits in nearly four years.
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Yet, some analysts pointed out suspicious clouds hovering over those low numbers, speculating that perhaps they weren’t quite accurate and would be subject to volatile change the following week.
Well, they were right, and jobless claims have jumped back up. However, experts don’t believe the recent increases are reason to doubt the idea that the job market is slowly finding its footing. In fact, the four-week moving average — a better indicator of labor market trends because it tempers week-to-week volatility — is down from a month earlier to 365,500, suggesting that the market is still heading in the right direction.
And a separate report on consumer sentiment indicates that Americans believe in the positive momentum. The Bloomberg Consumer Comfort Index rose to -34.8, its highest mark in six months. Last week the index read -38.5.
Surprisingly, since the end of September, the uptick in consumer comfort has been fueled by Republicans more than Democrats. One might expect the opposite, with President Obama’s reelection hopes so dependent on whether he can make people believe in his ability to resurrect the economy – something Republican challenger Mitt Romney has repeatedly called into question.
Still, it was Republican consumer comfort that rose 19.7 points, compared to a 13.6 point increase amongst Democrats and 5.2 point increase for Independents. On the whole, 30 percent of consumers believe the economy is getting better, the largest percentage since March.