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The chart showing that the US job market looks ‘normalized’

The much-touted monthly US jobs report—the September edition is due next Friday—gets all the attention, but weekly jobless claims are actually a better gauge of US economic growth, according to a recent Goldman Sachs analysis. So the just-released update, which shows that US jobless claims rose much less than expected, to just 305,000 last week, is very good news. (A previous sharp decline had been attributed to technical glitches in several states’ reporting of new claims for unemployment benefits. But today’s data were relatively unscathed.)

What’s important here is the context. The longer term trend confirms signs of an improving job market. The four-week moving average of weekly jobless claims is now at 308,000, its lowest level since 2007. “Readings around 300,000 represent a normalized level of layoffs consistent with healthy turnover in the labor market,” wrote Julia Coronado, an economist at BNP Paribas in New York.

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