Number of unemployed drops

The Department of Labor reported that initial jobless claims fell last week by 29,000 to 469,000.  Meanwhile, the four-week moving average which is designed to smooth the volatility in the data, fell 3,500 to 470,750.

Analysis: I am neutral about this information.  While an improvement in initial jobless claims of 29,000 is nice to see, the fact is that many job-seekers have stopped looking for work.  So one week’s worth of data is tough to extrapolate into a “candy mountain” recovery.  Initial jobless claims were improving for much of the last few months of 2009, only to see big increases so far this year.

Additionally, the moving average number, barely shows an improvement.  Not only that, but the weekly revisions to the data still are mostly to the downside, meaning not good.  It’s my opinion that this week’s data is a sign of continued uncertainty.  There is not a strong trend, which likely mirrors an uncertain economy.

Importance grade: 8; I have lowered the importance grade, because of the “treading water” nature of the data.  It will be interesting to see next week’s number in conjunction with the reduction in consumer confidence, as well as the results of retail sales.  These three combine to give a pretty good idea as to what is happening in the economy.

Jason