Initial unemployment claims fell sharply this week, reversing out the big jump the week before. In the week ending April 5, initial claims were 357K, a decrease of 53K from the previous week’s revised figure of 410K. The 4-week moving average was 378K, up slightly from the previous week’s revised average of 376K. You can read the full report by clicking here, Unemployment Insurance Weekly Claims Report.
As I wrote out last week, the big jump the week before was caused by the impact of the American Axle strike, which forced a number of auto assembly plants to close, resulting in 42K layoffs. This week’s number, 357K, is based on data collected a week after the layoffs, which gives us a clearer picture of the demand forces at work in manufacturing. The 4 week moving average of 378K is consistent with slow, positive GDP growth but not consistent with the negative GDP growth we would need to be a recession.