After 3 weeks in a row of claims figures above 380k after the steady fall from Sept, today’s report is encouraging. The 4 week avg though did rise to 384k from 383k because 4 week’s ago the reading was 362k which has now dropped out of the 4 week avg. Continuing Claims fell by 53k and Extended Benefits were lower by 62k. Bottom line, whether distorted by unusual seasonal adjustments because of an early Good Friday in early April or the give back from the weird winter, the jobs market recovery still remains lumpy and lackluster. Tomorrow’s Payroll gain estimate is only 160k, 165k of which is from the private sector.
In Europe, Draghi is speaking at his press conference. Although CPI for the euro zone is running above its target rate for 17 straight months, Draghi said inflation is in line with price stability and that inflation expectations remain firmly anchored. Of course with Spain grabbing headlines again in ways we don’t want to see, Draghi is focused on the debt crisis and not inflation and he specifically said they have ‘all tools available to act in a firmly, timely manner’ but ‘didn’t talk about cutting interest rates today.’ With a 1% benchmark rate already, all the ECB has to do is look at the experience of the Fed to know that cutting more is irrelevant to actually boosting growth. He’ll do more LTRO’s instead as his main tool if push comes to shove, the shove being a run on Spain and its banks.