After reaching its lowest level in nearly four years, initial jobless claims rose by 21,000 to 377,000 for the week ended January 21. The four-week average trended lower to 377,500, a modest decline from the previous reading of 380,000.
Jobless claims during the early part of the year tend to be volatile, as temporary seasonal jobs, particularly in the retail sector, are eliminated. While the Department of Labor attempts to account for that annual occurrence in its seasonal adjustments, the assumptions that are used are subject to future revision as well.
As such, this data should be viewed with a dose of skepticism. Nonetheless, the overall trend appears favorable.
The recent positive momentum in economic data continues and is not limited to the jobs market. Yesterday, the Fed acknowledged some recent firming, but extended its expectation for maintaining short-term interest rates at least through late 2014.
Unsettled risks remain, but better economic news has assuaged investor fears, at least temporarily.
Although we view the recent momentum in economic data as encouraging, we acknowledge the fact that the economy remains in a fragile state and is susceptible to exogenous shocks. Our outlook remains cautious given the ongoing uncertainty and structural headwinds that continue to face the global economy and capital markets.
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