Good news…sort of. Weekly jobless claims are back below 400,000 for the first time since early April. But seasonal adjustments may not be capturing certain factors that led to the welcome decline.
Weekly initial jobless claims dropped 24,000 in the latest week to 398,000.
The 4-week moving average, which smooths away some of the volatility in the weekly number, dropped 8,500 to 413,750. Continuing claims were down 17,000 to 3.7 million.
Anytime we see jobless claims come in well above or below the consensus forecast – in this case, 425,000 per Bloomberg – its important to footnote the drop by noting that this number can be volatile on a week by week basis.
Moreover, retooling in the auto sector at this time of year further muddies the data, even with seasonal adjustments.
At a time when gauges of economic activity are detecting economic weakness, the dip is welcome, but let’s keep a close eye over the next couple of weeks so we can confirm whether or not a very modest pick up in economic activity is at hand.
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