Photo: The Telegraph
Last week’s unexpected jump in weekly U.S. jobless claims couldn’t have been more disappointing.Jobless claims have been one of the best leading indicators of the stock market in recent years. So it came as no surprise to us that stocks sold off to end the week.
Some experts also worry that the spike in claims confirms fears that the recent improvement in employment data had everything to do with the unseasonably warm winter, not an improvement in the underlying U.S. economy.
Jim O’Neill, Chairman of Goldman Sachs Asset Management, continues to have faith that the U.S. economy is on the up and up. But even he is worried about the signal that jobless claims could be sending. He’ll be seeking some confirmation this week.
From this week’s Viewpoints:
I find myself wavering a little about the US recovery story. While for now, I’m happy to stick with our above consensus 2.5 pct real GDP forecast for 2012, and I buy into the housing sector recovery and shale gas themes, as I have frequently argued, weekly job claims are not to be ignored. While hoping last week’s would decline again, thereby rendering the March payroll disappointment as “susceptible,” in fact, it rose to 380,000, providing support to those who argue the apparent economic strength of the Winter was artificially helped by the weather. Next week’s release will be extremely important (as will the April Philly Fed survey).