The second estimate
of fourth-quarter GDP for the US shows that the economy eked out a
small gain in the final three months of 2012. The 0.1% increase for Q4
is a slight improvement over the 0.1% decline in the initial report. But as revisions go, this one's close to insignificant. By contrast, today's weekly jobless claims update offers more encouraging news. Good thing, too, since claims offer a more-timely read on the macro trend for the near term.
The number of people filing for jobless benefits last week dropped
22,000 to a seasonally adjusted 344,000. As a result, claims are close
to the cyclical low of 333,000 reached in mid-January 2013. The
four-week moving average of claims also dipped last week, showing a
modest bit of renewed momentum to the downside.
The year-over-year change in claims also posted a sizable drop in
today's update. New claims fell 8% last week vs. the year-earlier level.
That's a strong signal for anticipating that the labor market will
continue to mint jobs on a net-positive basis for the foreseeable
future.
If the weak Q4 GDP report is a harbinger of trouble for the economy
in 2013, there are minimal signs of blowback in today's claims report.
No one can rule out future turmoil, of course, particularly since the
uncertainty of the government's scheduled budget cuts is set to start
tomorrow and extend through the weeks (months?) ahead. Or will Congress
intervene and soften the automatic cutting? Meantime, to the extent that
jobless claims are a valuable leading indicator—and they are—there's a
good case for expecting that next week's February report on US payrolls
(March 8) will deliver a familiar refrain for this key indicator: modest
growth.