The U.S. economy is sending mixed messages again. Today, the government reported that new jobless claims rose by 25,000 last week, the largest rise in three months, wiping out the gains made since early April.
Meanwhile, The Conference Board reported a slight decline in its Leading Economic Index. The one-tenth of a percent drop in April may turn out to be an aberration, especially since the numbers are usually revised in subsequent reports. However, it is the first decline in a year and follows March’s 1.3 percent rise in the Index.
The decline was softened somewhat by the continuing rise in The Conference Board coincident index, a measure of current economic activity. That index was up .3 percent, the largest rise since November.
Says Ken Goldstein, economist at The Conference Board: “These latest results suggest a recovery that will continue through the summer, although it could lose a little steam.”
It was the jobless claims numbers that really rattled economists and added to the worries of a Wall Street already jittery over yet another drop in the value of the euro. The Dow was off about 245 points mid-afternoon in New York.
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Economists were expecting that the claims numbers would continue declining as they have since April 10th. Instead, new claims rose to 471,000, while the four-week average rose by 3,000 to 453,500. Averaging four weeks of claims smooths out sudden one-week jumps.
In what should be good news, the U.S. Department of Labor reported a 40,000 decline in the number of continuing claims. For the week ending May 8th, 4.63 million people were receiving unemployment benefits.
An additional 5.34 million workers — those who have exhausted the usual 26 weeks of state-sponsored benefits — are getting extended and emergency benefits from the federal government for the week ending May 1. The number is down 73,369 from the previous week.