Thursday, November 19, 2015

US Jobless Claims Decline Tells Us Nothing

The majority loves predicting future economic growth from the simplicity of headline analysis. For example, falling claims suggests fairly robust labor market which, in turn, supports the economic growth thesis and a Fed rate hike December. The business cycle, a complex cycle of trends that cannot be predicted by the simplicity of headlines analysis, could care less what the majority believes.

The Economic Activity Composite (EAC) has been contracting since February 2015. If the Fed hikes rates in December, it won't be long before headline experts are calling for a reversal of policy.

Headline: US jobless claims, continuing claims decline

The number of Americans filing for unemployment benefits fell last week, pointing to a fairly robust labor market.

In a separate report, the Philadelphia Fed Business Conditions Index for November came in at a better-than-expected 1.9 increase, compared with expectations of a drop of 1.0 and a decline of 4.5 a month earlier.



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