Trend is in the right direction
Weekly initial jobless claims rose 25,000 in the latest week, in line with expectations, as the problems making seasonal adjustments over the last month that have been tied to auto layoffs "return to trend," according to Bloomberg News.
The four-week moving average fell 8,250 to 559,000 and weekly claims remain below 600,000, the level we saw before the seasonality issues surfaced.
The bad news: claims are still well above the level that would suggest the economy is no longer contracting. Weekly jobless claims are one of my favorite indicators of economic activity because it is a barometer on business sentiment.
A low level of claims signals confidence, while a high levels tells me that companies are still feeling the sting of the recession and feel the need to make job cuts.
The good news: the direction is encouraging and indicates the recession continues to ease.
Meanwhile, continuing claims fell 54,000 to 6.2 million. The downward trend in continuing claims, though, must be tempered by the fact that some of those who are still unemployed have come to the end of their six-months of compensation and are no longer counted in the federal statistics.
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