Treading water – jobless claims

This morning weekly initial jobless claims fell by 6,000.  A gaggle of economists had expected a drop of 9,000.

Analysis:  Another week, another weak jobless number.  The economy just is not adding jobs at this point and the only reason that the unemployment rate seems to be falling is because the number of people who have given up looking for work has increased.  Additionally, these data are always revised, so an improvement in the initial jobless claims figure of just 6,000 on a U.S. population base of over 300 million is basically a statistical error.  However, in all data that tracks changes (i.e. calculus) both magnitude (the number of claims) and direction (up or down) are important.  So the shift in the last two weeks from “negative” numbers to “positive” numbers is noteworthy.  Yet, it’s my feeling that until there is movement on the unemployment rate, U.S. consumer confidence will remain sagged.  That, in turn, tempers consumer spending and the aggregate economy.

Somewhat positively, the number of claims anticipated by economists was fairly close to the actual number.  This may mean that the economy is becoming less volatile.  To make a definitive statement to that effect requires at least several more weeks of data, though.

Importance grade: 7; this remains an important number to track because of the potential for positive improvement in the number.

Jason