Jobless Claims Disappoint

Last week, we received a pleasant surprise when the Labor Department reported an unexpectedly-large decline in weekly initial jobless claims. The government had warned at the time the drop might have been caused by the Easter/Passover holiday and the difficulty adjusting for the holiday period. After viewing this morning's release, that appears to have been the case.

First-time filers rose by 27,000 to 640,000 in the week of April 18, just topping expectations and signaling that many firms remain uncomfortable with the environment. Last week, I mentioned that this report is one of my favorite indicators when it comes to gauging the temperature of the economy because it is current and provides a look at how business executives and owners feel about near-term prospects.

Falling claims suggest that companies are feeling more optimistic about conditions and want to hold onto their workers, while rising claims would signal the opposite. Looking at the trend over the last six to eight weeks, filings appear to have stabilized at a high level.

One final look at another piece of the report - continuing claims rose by almost 100,000 to a record 6.1 million, highlighting the difficulty that laid-off workers are having finding employment.