So far, so good. Jobless claims dropped last week by 23,000 to a seasonally adjusted 340,000, or near the five-year low of 327,000 for the week through April 27. The fact that new filings for unemployment benefits continue to stay close to the cyclical trough is an encouraging signal for anticipating that modest growth in the labor market will continue for the near term. Adding a bit of support for thinking positively is today’s Markit Flash U.S. Manufacturing Purchasing Managers Index (PMI) for May, which shows that the sector is still growing, albeit at a slower rate this month.
Daily Archives: May 23, 2013
Stocks & Inflation Expectations: Diverging Paths, Many Questions
The US stock market and inflation expectations have been going their separate ways for the past two months, which is something new by the standard of the last five years. Is this a sign that marks a break from the past, when higher the outlook for higher inflation was generally cheered by the market? Or perhaps it’s only a temporary divergence, in which case a correction on or both sides of this relationship will soon revive the new abnormal?