Weekly jobless claims fell 37,000 in the latest week to 391,000, the first time since early April that jobless claims dipped back below the psychologically important 400,000 level.
The unexpected decline also had a favorable impact on the 4-week moving average, which slipped 5,250 to 417,000.
Although this is one of my favorite leading indicators because of its timeliness and its read on business confidence – note, its rise above 400,000 in the spring provided an early warning signal on the impending slowdown, I’m skeptical about today’s welcome drop since there has been little else to suggest that a much-needed pick up in economic activity is at hand.
Further, Bloomberg News reported that difficulties in making seasonal adjustments may have played a role.
I’d like to wait for another round or two of data.
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