Initial claims have fallen to a new post pandemic low of 406,000.
Better news, but not exactly good news until the number falls below 300K:
Worker filings for jobless benefits fell again to a fresh pandemic low, extending a steady downward trend and adding to signs of a healing labor market and a broader, though uneven, economic recovery.
Initial unemployment claims for regular state programs, a proxy for layoffs, fell last week to 406,000 from 444,000 the prior week, the Labor Department said Thursday. That level represents the lowest levels of claims since the coronavirus pandemic’s onset last year and the fourth consecutive week claims have reached a new pandemic low. Economists surveyed by The Wall Street Journal had forecast there were 425,000 new claims last week.
A separate report from the Commerce Department showed orders for cars, appliances and other long-lasting, or “durable,” goods fell a seasonally adjusted 1.3% in April from March—the first monthly decline in demand for such products in a year. The decline was concentrated in the automotive sector, where a semiconductor shortage has caused disruptions, and the defense industry, which tends to be very volatile. Shipments of motor vehicles and parts fell sharply as well, while shipments of defense capital goods rose.
U.S. gross domestic product, a broad measure of the economy’s output of goods and services, rose in the first quarter at an annual rate of 6.4%, unrevised from the initial estimate, according to another Commerce Department report. Consumer spending, the economy’s key driver, was revised up to an annual rate of 11.3% in the first three months of the year.
It’s clear that the first quarter numbers, while quite good, are not sustainable. It’s a rebound from the economic contraction of the past year.
I would expect GDP growth numbers to return to trend, around 2½%.