Jobless Claims: Still Going Nowhere Fast

Initial jobless claims slipped by a mere 2,000 last week to a seasonally adjusted 402,000. This leading indicator seems to be telling us that the economy can avoid a new recession–maybe–but that’s about as far as the good news goes.

New filings for unemployment benefits remain stuck at elevated levels, offering a stark reminder that any optimism about the business cycle should be muted. An economy that’s growing is all well and good, but it’s a precarious growth without a stronger labor market.

“We’re not making much progress,” notes Robert Dye, chief economist at Comerica. “Unless we see the labor market improve, we won’t see income growth. The consumer will remain fundamentally constrained.”
The extent of that constraint is due for an update tomorrow, with the release of September figures for personal income and spending. For what it’s worth, expectations are somewhat rosy (adjusted for the current climate). The consensus forecast calls for a 0.3% rise for income (vs. a 0.1% decline in August) and 0.6% gain for spending (vs. 0.2% in August), according to Of course, some of this revival (assuming the forecasts are accurate) is already old news after today’s GDP update.