Initial claims for state unemployment benefits fell 30,000 last week to a level not seen since early 2008. The four-week moving average was also down.
Add that to last week’s report that the unemployment rate fell to 7.8 percent in September—around the rate when President Obama took office—and economist John Canally at LPL Financial is modestly impressed. “In general, the labor market has picked up some steam here in the fall,” says Canally. “I don't think it's going to be enough to satisfy the Fed.”
The Federal Reserve has pledged to keep borrowing cheap through low interest rates and asset purchases, to try to accelerate hiring. Meanwhile, Canally says other parts of the economy are starting to run on more cylinders.
“Stocks are near their all-time highs, the housing market has begun to recover a bit, and the job market is a little better than it was,” says Canally. “I think you throw all those things together, and people do feel a little more wealthy, a little more able to go out and splurge."
Exhibit A: Winnebago says orders for its RVs are back up to pre-recession levels. They cost up to $350,000 . Nice wheels, if you can afford them.