Kevin Spires, CFA, FRM
Initial Jobless Claims are notoriously choppy. Weather, like a snow storm or a hurricane, can cause drops or jumps in the weekly series that appear significant only to reverse out a few weeks later. Additionally, the placement of Easter or the placement of the bulk of the nation's spring break can cause the normal seasonal pattern to be off by a couple of weeks.
Initial Jobless Claims are notoriously choppy. Weather, like a snow storm or a hurricane, can cause drops or jumps in the weekly series that appear significant only to reverse out a few weeks later. Additionally, the placement of Easter or the placement of the bulk of the nation's spring break can cause the normal seasonal pattern to be off by a couple of weeks.
Initial Claims were 367k during the week ending May 5th. This was down from a revised 368k last week which was initially reported as 365k. The four week moving average declined to 379k from 384.5k. It looks like the later Easter Holiday caused a bump in claims due to seasonal adjustment issues and that "bump" is now reversing.
Investors follow claims closely because they tend to quickly capture directional changes in the overall economy. They are released weekly with a 5 day lag. To a certain degree, I think traders give Initial Claims a bit too much weight in the overall picture. Claims are so choppy that during a sustained expansion, Claims will increase - and appear to be tipping off the next recession - only to subside a couple of weeks later and make everyone echo the Church Lady as we all say "Nevermind." There is very little in the Macro picture to make me think we are in a timeframe where Claims should be watched for a directional change in the Economy.
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