The U.S. economy continues to improve, yet it is so tentative that we look for reassurances in all the tea leaves. Thursday brought us the weekly jobless report; Friday it will rain tea leaves when we get retail sales, industrial production, consumer sentiment and business inventories. Not much in any of this will make or break the recovery, but here are some interesting thoughts on those initial jobless claims number from High Frequency Economics:
Jobless claims fell to 444K from 448K last week, above the consensus,
440K. Last week’s claims were revised up by 4K. Yet more evidence that
the trend in claims, which dropped sharply in the second half of last
year, is now just about flat. The underlying story here, we think, is
that big companies slowed their layoffs dramatically in the second half
of last year and they are now stable or falling less quickly, but
credit-starved smaller firms are still laying people off in large
numbers. As a result, the headline claims numbers are stranded above
the 375K or so normally needed to signal positive payrolls. But
payrolls are rising, probably because larger firms are hiring back some
of the people they laid off last year. The NFIB survey, meanwhile,
strongly suggest small firms are nowhere near hiring again.