Claims Data Argue Against Growth Scare

While the markets are apparently reacting to a "growth scare" today, today's release of Claims data suggest this scare is overdone with regard to the US economy.  Both Initial and Continuing Claims displayed holiday-related volatility in the past two weeks, leaving the underlying levels little changed. 

To be sure, US economic growth is not strong.  The Atlanta Fed's model now projects only +0.4% (q/q, saar) for Q116 Real GDP Growth.  But, the downtrend in Continuing Claims and uptrend in the ECRI Leading Index over Q116 point to a speedup in GDP Growth in Q216.

1.  The  -9k w/w in Initial Claims to 267k, after +12k in the prior week, put them right around the Q116 average, showing layoffs are essentially stable.

2.   The +19k w/w in Continuing Claims to 2.191 Mn, after the -8k in the prior week, put the two-week average in line with the low 2.180 Mn level in mid-March and kept them well below the 2.217 Mn Q1 average.