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Macro View

U.S. stock futures stayed up before the open on Thursday after the weekly claims report show applications for unemployment benefits last week rose by +4,000 to 371,000.  This was a one-month high.  Economists had forecast claims to fall to 365,000.  

U.S. job creation has been stable over the past two years, adding +153,000 new jobs a month on average since the start of 2011.   Over the past few months, the level of claims stands little changed.  This is consistent with a modestly improving U.S. labor market. The one-month average -- a more accurate number that reduces weekly volatility-- increased by +6,750, to 365,750. Consensus says “don’t expect a big pickup in jobs this winter”.  Another showdown in February in DC, this time over the U.S. debt ceiling, and sharp cuts in defense and entitlement programs could be enacted unless lawmakers alter current law.  Payroll taxes just went up on millions of workers, reducing after-tax incomes available for consumer spending too. What is your take?  More muddle through looks like it is safe and sound to me.  Or is the rise in the payroll tax, and coming spending and debt limits talks enough to drive down the momentum?


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