The lack of any significant upward are downward movement in jobless claims, following a brief dip earlier in the year below 400,000, is telling us that the economy continues to slowly improve.
Based on the release as well as recent trends, no new recession is on the horizon but any pick up in economic growth is unlikely, either.
Simply put jobless claims are still elevated, underscoring the uncertainty many of us feel regarding what’s happening in the economy.
Despite the lack of any signs of an acceleration in economic activity, the Chicago Purchasing Managers Index, which looks at manufacturing activity in the Midwest, unexpectedly rose in the latest month.
A possible pick up in auto production tied to an easing of the supply chain disruption from Japan that followed the tragic earthquake that hit the nation earlier in the year might explain the welcome rise in the index.
Both production and new orders surged, while inventories tumbled. Unfortunately, prices paid eased slightly but remained at a worrisome level, which is somewhat surprising given the recent fall in commodity prices.
Nonetheless, the Chicago PMI tends to be a rather volatile index, and other measures of regional manufacturing have slowed significantly.
We’ll get a better read when the ISM Manufacturing Index is released on Friday.
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