Weekly Job Claims
What this data shows is that the economy is generally improving. The unemployment indicator shows a clear trend that the unemployment rate is decreasing. While there is some fluctuation in most other indicators, this one has a solid trend line. Another indicator that shows a straight trend line is the FOMC statement, as the FOMC has kept interest rates steady, and low, for the past six months.
is an interesting indicator, mainly for the outlier in October. While the level of confidence has generally not changed much, something happened in October to drive confidence down dramatically. It has since returned to its normal level. The GDP is growing, slowly.
The other indicators provide a mixed view of the economy. have both increased and decreased. The CPI, a measure of inflation, has wavered over the course of the past six months. Inflation through was strong through the summer, but has since fallen back to deflationary levels. The CPI measure, it should be noted, is the headline number that includes food and gas. Gas prices went up in the summer and have since fallen back — this could explain the change in CPI. Core CPI would probably be a better measure.
have also varied over the course of the last six months, bouncing between gains and losses, showing very little in the way of a trend. This sends mixed signals about the state of manufacturing in the country. The Philadelphia Outlook is a regional indicator, and this is something that has also seen a lot of volatility of late. The outlook was very negative in August and September — there were some serious issues such as the debt ceiling debate that could have been responsible for the strong negative outlook. The outlook has turned slightly positive of late though, an encouraging sign.
Overall, the data provides a mixed signal about the state of the economy. The major headline numbers — GDP and unemployment — are improving. This is supported by the FOMC’s statement, which has shown that rates are going to stay low. However, there are some mixed signals in the other data, including CPI, real earnings and durable goods orders.
The type of number of course is important. Some of the numbers are more sensitive than others, and some are better indicators of the economic conditions of the country. The Philadelphia survey, for example, is regional and subjective, which makes it a less useful indicator. Such data is important to have, but it is not as important as the hard quantitative data that is nationally based. That type of data is typically more important for determining the course of the U.S. economy. So once some of the less important data are excluded, the headline-type numbers show a generally improvement trend in the U.S. economy. Even the decline in the CPI might not be bad, because if that is the result of lower gas prices rather than actual deflation, then that is something that will benefit the economy overall as well.