THE BASIS POINT

Have jobless claims hit bottom?

Initial Jobless Claims (week ended 1/16/2016)

– New Claims seasonally adjusted 293,000. Previous was 283,000
– New Claims  unadjusted, totaled 377,730 a decrease of 125,174 from previous week
– 4-week Moving Average seasonally adjusted  285,000. Previous was 278,500

Jobless claims are up for the fourth straight week. It is a bit difficult to draw conclusions because the seasonally adjustments have been so large but it most certainly appears that Jobless Claims are not going to continue lower. The uncertainty in the world economy is not going to translate into jobs.  We may also be seeing the effects of the fact that near-zero rates translated into corporate decisions to borrow for stock buybacks (which increased earnings per share) rather than engage in capital expenses.

 

Philadelphia Federal Reserve Business Outlook Survey (January 2016)

– General Business Conditions -3.5. Previous revised from -5.8 to -10.2.

This marks 5 consecutive months of contraction.  This is a survey index of manufacturing conditions within the Philadelphia Federal Reserve district.

This is another of a continuing series of messages showing that manufacturing is in trouble in the U.S.