For the past few months, I have been running a scatter graph of initial jobless claims (left) and monthly jobs gained/lost (bottom) since jobless claims hit their peak in March 2009. Blue is all private jobs, red includes government jobs as well (except I have excluded the March through August 2010 period which was distorted by census hiring and firing):
As I have previously pointed out, there is a nearly linear relationship. So long as initial claims continue under 400,000, we should expect robust monthly jobs reports (with a very big +/-125,000 variance, however).
So, why an update on this issue now? The BLS conducts its survery during the week just before mid-month. The 4 week average of initial jobless claims now is about 15,000 less than it was 4 weeks ago, when over 200,000 private jobs were added to the economy. In short, subject to the huge variance desribed above, and keeping in mind that it will (probably) be described as "disappointing" at first, only to be revised higher in the ensuing two months, we can expect a pretty good March jobs report a week from tomorrow.
