The drop in both Initial and Continuing Claims in the latest week could be a sign that the economy is picking up momentum at the end of Q116. To be sure, one week's data are not enough to make a trend, and school-related spring breaks could impart some volatility into the data at this time of year (New York had a large drop in Initial Claims this week). Nevertheless, today's data, the last Claims report to be released ahead of the March 15-16 FOMC meeting, at the minimum should dent the downside concerns about the economic outlook expressed by some Fed officials.
The -18k w/w in Initial Claims to 259k in the March 5 week and the -32k w/w in Continuing Claims to 2.225 Mn in the February 27 week put them back to the lows seen in Q415 -- suggesting their run-up over January-February may be over. It is possible that the recovery in the stock market since mid-February has quickly boosted business and consumer confidence.
This is important, since it would show that the pickup in Q116 Real GDP Growth is not just a weather-related bounce. And, it would set the stage for above-trend economic growth to persist into Q216. It will be important to see if Initial Claims stay below the 270k+ levels of January-February in coming weeks.
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