Jobless claims in the current week fell to 359K from 364K. But we previously thought claims were at 349k so a drop of 5K would have left them below 345K. Not now.
The problem is NOT -NOT- the week the problem is that the benchmark revision has done damage to a very favorable trend.
The benchmark revision has sucked a lot of the downtrend (a good thing for jobless claims) right out of this time series.
Claims are averaging an increasingly higher figure above the previously-reported levels. The 4wk average from last week is higher than it was in the old data by 14,000. And, the current level of claims is higher above the old level, the fresher are the observations. In other words we are losing momentum faster than we thought and we have made less progress on claims than we thought.
Continuing claims also are higher and progressively higher.Their 4wk average for two weeks ago is higher by 24,000 than it had been previously.
The news on claims is still good. Claims levels still have dropped, and sharply. The insured rate of unemployment is still at a cycle low 2.6%. But the depth of the drop in claims is less than we thought and the sense of ongoing progress is now diminished.
It's a bad news report for optimists.
We will see if its reduced momentum signals slower growth ahead than we thought or if the economy continues to make strides.
Keep an open mind.