Last week, I called the sharp drop in weekly filings for unemployment benefits "unambiguously the best news on employment the U.S. economy has witnessed in many months." The reason: There appears to be a strong correlation between a peak in the four week "moving average" of weekly jobless claims and the bottom of a recession. And we appeared to have summitted that peak in early April.
Thursday's figures require a more cautious appraisal. Jobless claims jumped up sharply, by 34,000, and the four week moving average also rose, for the first time in several weeks. The new numbers do not yet prove that the April peak was false, and could, with good reason, be dismissed as statistical "noise." But they definitely weaken the case that some optimists were building, and in combination with Wednesday's news on foreclosures and retail spending, they deepen the economic gloom.