Jobless claims continue to decline

On a seasonally adjusted basis, jobless claims were somewhat higher than expected (408K vs. 400K). But the actual data (see chart above) showed a decline of 12K. Relative to the same month last year, actual claims are down 15%. What to make of all this? Sometimes, especially with the claims data, seasonal adjustment factors can be off (i.e., the real world doesn't always behave the way the seasonal adjustments predict). If you compare things year to year, you see a clear decline. Conclusion: the job market is continuing to improve, in the sense that fewer people are getting fired.

Morgan Stanley had a report out yesterday titled "Dangerously Close to Recession." (The report was a bit sensational, since it also contained the words "recession is not our base case.") Europe has some legitimate concerns, but I don't see anything here in the U.S. that would suggest we are even close to a recession, and this chart would be Exhibit #1.

UPDATE: The chart below of the July Leading Indicators released today would be Exhibit #2. No sign at all of an impending recession.