Jobless Claims Are Stuck In Neutral… For Now

No news is good news at the moment for weekly jobless claims. Today’s update shows a small rise in last week’s new filings for unemployment benefits, and that’s a good thing, for now, considering what might have been. Recall that the numbers in March showed a disturbing tendency to rise, and rather sharply by the standards of recent history. It all looked quite dark after considering the wobbly data for March in payrolls and retail sales. Those worrisome signs are still with us, of course, but the good news is that jobless claims pulled back from the brink for the week through April 6 and today’s report suggests that the retreat is holding.

Yes, it would be far more encouraging if claims delivered another big drop. The next-best thing is hanging on to the previous round of progress, which is basically what today’s release shows. Last week’s claims rose 4,000 to a seasonally adjusted 352,000, but that’s a rounding error for this volatile series in any given week. Keep in mind too that the data du jour remains close to the post-recession low of 330,000, set back in January. In sum, the possibility that we may see even lower levels for the cycle is still within the realm of plausibility, even if it’s somewhat hard to fathom at the moment.

Another productive sign is the fact that the year-over-year change in the unadjusted claims data is still falling with the typical range in recent history.

But if today’s report sidestepped what could have been a far darker signal, we still fell short of convincing news that jobless claims have resumed the downtrend that was evident in previous months. We may yet see a return to form, but for the moment the best you can say is that the trend is flat. That’s hardly fatal at this point. Nonetheless, shaky economic numbers elsewhere leave open the possibility that the economy has entered a new phase of turbulence. That’s still mostly a guess, although it’s hard to ignore the fact that the March data has been a mixed bag so far.
Even so, there’s still no smoking gun in the numbers generally in terms of analyzing the big picture, as I’ll discuss tomorrow, when I update the data for the Economic Trend & Momentum indices. Meantime, jobless claims seem to be stuck in neutral. There’s still plenty to worry about, but the numbers have yet to issue a clear warning that the cycle has stumbled. The case for expecting slow growth, although a bit more battered and bruised these days, is still with us.