Will the jobless claims drop be followed by the unemployment rate ?

Applications have fluctuated between 360,000 and 390,000 since January. At the same time, employers have added an average of nearly 150,000 jobs a month. That’s barely enough to lower the unemployment rate, which has declined from 8.3 percent to 7.8 percent this year.

Robert Kavcic, an economist at BMO Capital Markets, said jobless claims have struggled to fall below 360,000 this year.

“That barrier could be a good level to watch for an indication that the U.S. labor market is kicking into a higher gear, but we’re just not seeing it yet,” Kavcic said in a note to clients.

Employers are hesitant to add more workers as long as growth remains tepid and Europe’s financial crisis threatens to push that region into recession. Many also are holding off because they are worried about tax increases and government spending cuts that would kick in next year if Congress doesn’t reach a budget deal to avert them…

Choosen excerpts by JMM from

via Jobless claims drop. Unemployment rate to follow? – CSMonitor.com.