US labour market cooling

MarketWatch reports the weekly initial jobless claims.

The Labor Department reported that weekly initial jobless claims fell by 20,000 to 321,000 in the week ending April 21. That's the lowest level in a month.

The four-week moving average of new claims, meanwhile, rose to its highest level since March 3, to 332,000...

The number of people collecting unemployment checks rose by 65,000 to 2.59 million in the week ending April 14, the most since Feb. 17. The four-week average of continuing claims rose by 19,250 to 2.53 million.

Meanwhile, the Conference Board reports that its Help-Wanted Advertising Index dipped one point in March to 30. It was 37 one year ago.

The Wall Street Journal's Greg Ip seems to think that the labour market is not cooling at a rate commensurate with that of the economy. In a recent article, he wrote:

When the Commerce Department publishes first-quarter growth estimates Friday, it will accentuate a puzzle with implications for interest rates, growth and U.S. living standards: With the economy growing so slowly, why is unemployment falling?

Explanations range from measurement problems to the peculiar behavior of construction jobs to the possibility that productivity growth is easing.

Barry Ritholtz at the Big Picture reads the article and suggests that either "Growth is better than reported, or Employment is worse than reported".

But before we go into possible explanations, let's take a look at a chart of the actual data.


From the above chart, it is not very obvious to me that there is anything amiss in the relationship between employment/unemployment level and GDP so far.