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Claims continue to fall




First-time claims for unemployment last week fell by a surprisingly large amount, and were significantly less than expected (352K vs. 384K). Nevertheless, at this time of the year, when layoffs are just coming off their annual peak, the seasonal factors are very large so we have to take this news with a few grains of salt. Still, it's clear that employers by now have done the bulk of the cost-cutting and cutbacks that they needed to do, so the next phase of the economy's expansion will see more emphasis on new jobs rather than getting rid of jobs. That process is underway, but only gradually. Things could improve more convincingly as the year wears on and employers get more comfortable with the likely future direction of fiscal and monetary policy.


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