🚨Hormuz Strait Now Completely Open for Commercial Ships, Iran Say

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Initial unemployment insurance claims fell last week to 207,000 from 218,000. Continuing claims rose to 1,818,000 from 1,787,000, but they are still trending downwards despite the 2-week sawtooth pattern.

Combined they point to modest layoffs and a possible upturn in hiring.

Chart of UMich Consumer Sentiment since the 1970s

UMich all-time low

Inflation was looking like a problem even before the war. On a three-month annualized basis, PCE (both headline and core) topped 4% in February. Year-over-year core PCE is up 3%. And now the war will push prices higher. #NumbersDay
More from @colbylsmith.bsky.social: www.nytimes.com/2026/04/09/b...

Initial UI claims rose to 219,000 from 203,000. A jump but still below same period last year.

Continuing claims fell sharply to 1,794,000 from 1,832,000, below the same week in 2025 & 2024. Important to watch to see if it portends an uptick in hiring

The largest # decline over the last year in business applications w/ planned wages has been in retail, other services, transportation & warehousing, construction, though the % declines are similar across industries

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New business applications declined in March. Notably, business applications with planned wages (that might be more predictive of employment) are down -18% YOY and are at their lowest level since May 2020

Source: Census Bureau, www.census.gov/econ/bfs/cur...

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Bank of America Institute data estimates +1.4% year-over-year growth in payroll employment (3-month trailing avg) in March, much stronger than ADP & BLS data, but consistent with the idea that the job market firmed/reaccelerated in Q1 2026.

institute.bankofamerica.com/content/dam/...

Dallas Fed research estimates current breakeven jobs growth is near 0 (-3,000 jobs per month from Aug–Dec 2025) as their estimate of net migration remains negative.

www.dallasfed.org/research/eco...

Employee sentiment rebounded in March, similar to the dip->rebound seen in the Feb & Mar jobs reports.

In the Glassdoor Employee Confidence Index, 47.1% of employees reported a positive business outlook for their employers in March, up from 44.8% in February.

www.glassdoor.com/blog/glassdo...

Got tired of looking up BLS series, whipped this up with Claude Code

prestonmui.github.io/bls-series-l...

The unemployment rate improved in March for Black (-0.6pp), Hispanic/Latino (-0.4pp), Asian (-1.1pp) & white (-0.1pp) workers.

For Black & Asian workers, this was married with a slight decline in labor force participation in March.

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Prime-age (25–54) labor force participation fell slightly to 83.8% in March, but is still just a tick below recent peaks and at a healthy rate overall.

Similarly, the prime-age employment-population ratio(flat in March) is near recent peaks.

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The unemployment rate fell to 4.3% in March, down from 4.4% in February. Unemployment has recovered since the fall 2025 govt shutdown, mitigating fears of a snowballing increase.

The drop in March, however, was in part driven by falling labor force participation.

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Average hourly earnings grew 3.5% year-over-year in March, down from 3.8% in February. 3.5% is the slowest since May 2021

However, the slowdown is in part due to faster wage growth last March falling out of the calculation. The 3-month annualized avg right now is 3.9%.

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March rebound means Q1 is looking a lot better in some industries vs. H2 2025: Professional & business services, education, construction, retail, manufacturing trending better.

Information, finance trending down. Transportation & warehousing, govt losing jobs but at slower pace in Q1.

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The Kaiser Permanente strike drove part of the dip & rebound with 31,000 striking workers falling off payrolls in Feb & returning in Mar.

In Q1 2026, health care & social assistance averaged 56,000 job gains monthly, in line with 52,000 average from H2 2025. Only a touch slower than recent yrs

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Payroll employment rebounded to +178,000 in March, surging from the -133,000 job loss in February (revised down from -92,000).

Despite the month-to-month volatility, the 3-month trailing average of jobs growth is 68,333, fastest pace since April 2025.

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Strong rebound in Mar BLS #jobsreport after surprisingly weak Feb:

-Payroll employment surged 178k, rebounding from -133k loss in Feb (revised down further from -92k)
-Unemp down to 4.3% from 4.4%
-Wage growth slows to 3.5% YoY from 3.8%

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Hiring is more and more dominated by AI.

How do those results compare to human recruiters?

www.chicagobooth.edu/review/does-... #econsky

Figure 2. Breakeven pace of employment growth This is a line chart showing monthly data from 1960 to 2030, with the y-axis measuring monthly change in thousands, ranging from -100 to 300 thousand. The chart displays "Breakeven employment growth" as a black line, surrounded by a gray shaded area representing the "90-percent confidence interval." The breakeven employment growth line fluctuates between approximately 50 and 200 thousand throughout most of the historical period, generally trending downward after the 1980s. The confidence interval typically spans about 100 thousand above and below the main line. A horizontal line at zero marks the breakeven point. Near the end of the series, there is a vertical dashed line labeled "2026" indicating a projection point, with the breakeven employment growth appearing to decline toward zero by 2026.

Breakeven job growth (the pace needed to maintain a steady unemployment rate) near-zero. Could make negative job growth almost as likely as positive job growth in any given month. 2: Any growth in potential GDP must come from productivity growth. (2/2) www.federalreserve.gov/econres/note...

Image of Figure 1. Potential labor force growth and its components. This is a combination chart showing annual data from 1960 to 2030. The y-axis measures annual rate in percent, ranging from -1 to 3 percent. The chart displays three variables: "Potential labor force growth" shown as a red line (measured in percent change), "Population change contribution" shown as gray bars (measured in percentage points), and "Potential LFPR change contribution" shown as blue bars (measured in percentage points). The potential labor force growth peaked in the early 1970s at about 2.8 percent, gradually declined to around 1.5 percent in the 1990s, and further decreased to about 0.5-0.7 percent by the 2010s. The population change contribution (gray bars) remains positive throughout the entire period but gradually decreases over time. The potential LFPR change contribution (blue bars) was positive from the 1960s through the 1980s, turned negative around 2000, and has remained mostly negative since then. A vertical dashed line marks the year 2026, where potential labor force growth is projected to be approximately 0.5 percent.

Labor force growth could be near-zero starting this year, due to weak population growth and declining labor force participation. Such weak growth is unprecedented in the United States’ recent history. This has significant economic implications: (1/2) www.federalreserve.gov/econres/note...

Reminder ahead of tmrw's jobs report: Kaiser Permanente strike subtracted 31,000 (est.) from Feb's payroll estimates and those workers being added back to payrolls will artificially boost Mar job gains.

No new strikes are expected to impact the Mar report: www.bls.gov/ces/publicat...

The U.S. finally bent the healthcare cost curve, one economist says | TechTarget Health economist David Cutler's new analysis shows a deceleration in U.S. healthcare spending as technology advancements make care cheaper.

Jacqueline LaPointe summarizes David Cutler's new @brookings.edu paper which argues, with detail, that the US has bent the health care cost curve. www.techtarget.com/revcyclemana...

Initial claims fell to 202,000 last week from 211,000 the week prior and are solidly below levels from a year ago. Similarly, continuing claims (which rose to 1,841,000 from 1,816,000) are trending below the same point in 2025.

Could point to a stronger March jobs report tomorrow

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Was asked in an interview recently what the implications of higher productivity are for the Fed, and frankly I think there isn't a simple answer. I like Musalem's response here, which I think captures the evidence and risks at play.

Feb data is a little hard to interpret given how surprisingly poor the jobs report was e.g., could it be a blip due to weather?

Feb data also already feels like old news as it doesn't incorporate any impacts from the U.S.-Iran war which will likely cloud the data in the coming months.

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The current hires rate (3.1%) is unusually low relative to the current unemployment rate (4.4%):

From 2001–2019, when the hires rate has been 3.1%, the unemployment rate has averaged 9.3%.

Conversely, when the unemp rate has been 4.4% in that time period, the hires rate has averaged 3.8%.

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Layoffs ticked up slightly in February to 1,721,000, though remain roughly aligned with pre-pandemic levels. The sluggish hires rate is the important indicator of softness in the job market today than layoffs, despite the latter's attention-grabbing headlines.

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