Flash: US nearing end of improving layoff side of hiring-firing equation - DBS Group

FXstreet.com (Barcelona) - DBS Group analysts believe that recent Jobless claims numbers indicate that the US is nearing the end of the line for improvements on the layoffside of the hiring-firing equation.

They notes that Jobless claims rose back to 354k last week from 344k the week before which is not a big move but it highlights that the US is probably nearing the end of the line for improvements on the layoff side of the hiring-firing equation. If so, they feel that this means further increases in nonfarm payrolls, for example, would have to come from more hires, not fewer fires. They write, “That’s possible but stronger growth – stronger than the 1.4% (QoQ,saar) averaged over the past two quarters or 2% averaged over the past 8 – would be required.” Historically, they note that jobless claims of 347k / week (the current 4-week moving average) are associated with nonfarm payroll gains of 162k per month. Faster GDP growth would push actual outcomes to the higher/ brighter side of the regression line but that takes time. They add, “Not for nothing do markets expect a 165k payrolls outcome next week.”