Maintaining an optimistic outlook on the US economy has been a bit tougher lately. But one indicator has continued to shine while others have stumbled: initial jobless claims. The upbeat trend continues with today’s release. New filings for unemployment benefits inched higher last week, but remain close to a 15-year low. Although some data sets are looking wobbly these days, new claims are a conspicuous exception and still point to ongoing growth for the labor market.
Jobless filings ticked up by 3,000 last week to a seasonally adjusted 265,000, but that’s near the lowest level since 2000. It’s notable that the previous week’s total, which represents a 15-year low, was left unrevised. The sight of two back-to-back numbers at or near the lowest levels in more than a decade suggests that the recent slide in claims is the genuine article.
It’s also striking to see that claims continue to fall at a robust pace on a year-over-year basis. New filings dropped 18% last week vs. the year-earlier level, which reflects a strong downward bias and one that’s generally associated with a solid economic expansion.
In sum, the bullish momentum in the claims data rolls on. This leading indicator is Exhibit A if you’re looking for evidence that the US economy’s recent stumble is a temporary affair as opposed to the start of something darker. That’s not to say that the first-quarter weakness was a mirage. But for the moment, it’s still a stretch to argue that economic activity is destined to slip over to the dark side of the business cycle.
Instead, there’s a more nuanced debate to consider, namely: Will the US economy break free of its modest trend of recent years and deliver a stronger rate of growth on a sustainable basis? The signs looked encouraging in late-2014 and through early January, but the momentum faded as the new year unfolded.
The key question now: Will growth re-accelerate in Q2? That’s still a debate in progress, although today’s jobless claims report has cast another vote in favor of optimism.