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Is Currency Fluctuation Effecting USA Economy?

Two points this week:

  1. I do not understand the focus on initial unemployment claims. If they stay under 400,000 - there is little to no correlation to the jobs gain for the month. The data wobbles in any event, and is seasonally adjusted. I have no issues with the seasonal adjusting methodology of the DOL - but it still is a guess. I would only worry if claims went over 400,000.
  2. There is a general softness in the coincident data but nothing to raise a lot of concern. What I am concerned about is the strengthening of the dollar which is already effecting exports. This is one reason industrial production is soft. I know of no economic forecast that adjusts for currency variations.

The Econintersect economic forecast for May 2012 declined marginally, but remains in a zone which says the economy is beginning to grow normally. There are some warning signs that our interpretation is not correct - but we will see how these play out in the coming months.

The ECRI WLI growth index value has been weakly in positive territory for over four months - but in a noticeable improvement trend. The index is indicating the economy six month from today will be slightly better than it is today.

Current ECRI WLI Growth Index

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Initial unemployment claims rose from 323,000 (reported last week) to 360,000 this week. Historically, claims exceeding 400,000 per week usually occur when employment gains are less than the workforce growth, resulting in an increasing unemployment rate (background here and here).

The real gauge - the 4 week moving average - modestly degraded from 336,750 (reported last week) to 339,250. Because of the noise (week-to-week movements from abnormal events AND the backward revisions to previous weeks releases), the 4-week average remains the reliable gauge.

Weekly Initial Unemployment Claims - 4 Week Average - Seasonally Adjusted - 2011 (red line), 2012 (green line), 2013 (blue line)

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Bankruptcies this Week: SBM Certificate, Skinny Nutritional

Data released this week which contained economically intuitive components (forward looking) were:

All other data released this week either does not have enough historical correlation to the economy to be considered intuitive, or is simply a coincident indicator to the economy.

Weekly Economic Release Scorecard:

Initial Claims Not Great but Not as Bad as Claimed
US Guns: What Should Be Done?
Facebook IPO? Should Have Bought Yahoo! Weekly Wrap-Up 17 May 2013
Markets Close Higher Once Again On Relatively Low Volume
What We Read Today 17 May 2013
Indices Coasting Sideways on Low Volume
'US clamps down on Bitcoin, fears lack of control'
Preliminary May 2013 Michigan Consumer Sentiment Highest Since July 2007
10 May 2013 ECRI's Weekly Leading Index Growth Declines
Markets Open Higher Near Previous High Marks
April 2013 Leading Economic Index Forecasts Continuing Economic Expansion
Really Real Rates vs. Gold
Trade With The Trend Technical Analysis 16 May 2013
Bitcoin: US Government Freezes Account of Largest Exchange
Infographic of the Day: Is There Silicon Beyond the Valley?
Fed's Balance Sheet 15 May Continues Record Growth
Alternative fur Deutschland?
Investing in Recovery. What Recovery?
Half the World on Facebook
Uncertainty, Liquidity Hoarding, and Financial Crises
Indices Close Down - Mr. Market Unwilling To Give Clues
What We Read Today 16 May 2013
Falsterity: France slips into new recession amid higher taxes
Midday Markets Flat And Uninspiring To Savvy Investors
Week Ending 11 May 2013: Total Rail Traffic Again Improves
May 2013 Philly Fed Business Outlook Goes Negative
Sea-Saw Market, Low Volume, Flat, Small Caps Lead
Residential Building Sector Growth Continues in April 2013
April 2013 CPI Moderates to 1.1% Year-over-Year Inflation
11 May 2013 Unemployment Claims 4 Week Average Is Marginally Worse
Implications of Fiscal Austerity for U.S. Monetary Policy
Walter Young: A Self-Made Man!
April 2013 Sea Container Counts Are Still Contracting
Global QE and Investment Assets
Schizophrenic U.S. Housing Market
Gold Sector Remains In Dog House
Infographic of the Day: Alarming Facebook Misuse Stats
Eurozone: Fifth Quarter of Contraction
Japan: GDP Wakes Up
Many Tweets from a Few, Media Usage Expands
Self-defeating Austerity Shocks
What We Read Today 15 May 2013
Markets Close Higher Among Heavy Profit Taking
Averages Change Direction And Head North Again
Wireless car charging
Markets Open Lower - Remain In The Red, Flat and Directionless
Nonfinancial Leverage NFCI Again Less Good w/e 10 May 2013
April 2013 Industrial Production Soft - But Still In a Growth Trend
May 2013 Empire State Survey Goes Negative - Under Expectations
April 2013 Producer Price Index Shows Almost No Year-over-Year Growth
How Are American Workers Dealing with the Payroll Tax Hike?
France: Triple Dip
Update On The Japanese Pairs
Europe: Spreading the Pain
What Do Weekly Unemployment Claims Tell us About Recession Risk?
Will Labor Force Participation Bounce Back?
Will North America Cause 5-Year Global Energy Production Bubble?
Infographic of the Day: How the Hubble Space Telescope Works Technical Analysis 14 May 2013
A Reversion to A Dickensian Variety of Capitalism
New Highs For Averages - Sour Outlook For Investors
What We Read Today 14 May 2013
Averages Continue To Seek New High Ground With HFT help
Mission Accomplished: Soyuz returns from ISS after 146 days in space
Markets Move Sharply Up Stay Under A 75% Increase
Export / Import Price Deflation in April 2013
April 2013 Small Business Optimism Index Rebounds Slightly
Stratfor: The Decline of the Colorado River
Philly Fed's Plosser: Using the Corridor When Exiting QE
Has the Great Gold Crash Divorced Bullion from Futures Prices?
Skills, Education and Employment
Retail Sales Stay Right on Trend but Economists Get It Wrong Again
Euro/Dollar Weekly Update 13 May 2013
Anarchy In The US
eBooks Account for 23% of U.S. Publisher Sales in 2012
Infographic of the Day: NASA's Planet-Hunting Kepler Telescope Explained
Prometheus: Stock Market Investment Risk Holds at Historic High
Week Ending 13 May 2013: 6.5 cent Gasoline Price Rise
As Usual, 'No One' Saw The Shrinking Budget Defecate
What We Read Today 13 May 2013
Car bomb kills at least 15 outside hospital in Benghazi, Libya
March 2013 Business Inventories and Sales Continues to Show Little Improvement
Retail Sales Stronger than Expected in April 2013
Housing Smoke and Mirrors (5) - 'Zombie Fed'
Niall Ferguson's Latest Gay Bashing is the Least of His Problems
David Rosenberg: A Bond Bull Turns Bearish
Bartlett Naylor: JP Morgan Cheated on Stress Test
Infographic of the Day: Just What Is Money Laundering?
Central Bank Tsunami
Ritholtz: This is Your Brain on Stocks
Dear Mr. Hilsenrath- QE 3 Has Not Boosted Jobs - Au Contraire
Sunday Evening News for the Eurozone: May12
Sunday Evening News from China: May 12
America's Chinese Dream
What We Read Today 12 May 2013
Military Millions: US spends fortune on Israeli Iron Dome amid efficiency doubts
The Week Ahead: Are We Waiting on Consumers?
Will the New U.S. Pilot Be Skilled with Helicopters?
Inequality of Wealth is Similar to Natural Processes
All Wars Are Bankers' Wars
Infographic of the Day: Most Expensive Cities
Trefis: Highlights Week Ending 10 May 2013
What We Read Today 11 May 2013
Keynesian Economics vs. Austrian Economics
City Charged with Securities Fraud
Hollande, the Winner? Weekly Wrap-Up 10 May 2013
Big brother not only watching: New spy software can 'predict future'
Time Series Analysis
Make 'em Prove the Causality Before They Cause Any More Suffering
"Nuns" on the Run Nabbed in Cocaine Bust
Water park aboard Norwegian's new cruise ship
Three US women missing for about a decade found alive
Escobar: Israel gets US's blessing to bomb Syria
Prometheus: Stock Market Secular Trend Review
US gun lobby warns of Obama 'plot'
Blatant Blitz: Israel bombs Syria, targets chem weapons depot?
Space Zoo: Russia sends over 100 creatures into orbit
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.