Claims update: still positive

Weekly unemployment claims have been erratic in recent weeks, a sure sign of seasonal adjustment problems. It now looks like the typical auto industry layoffs that occur in July have been fewer than expected, so in a few weeks we should see the true underlying trend reassert itself, and it will likely prove to be still downwards. Although the number of people receiving unemployment insurance (second chart above) has ticked up in recent weeks, on a year over year basis (which eliminates seasonal variations) it has been declining at about a 15% rate for most of this year.

On the margin, these timely indicators of the health of the economy continue to be positive. As the chart below suggests, the gradual improvement in the level of weekly claims has been helping to guide the equity market higher.