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Initial Claims 4-Week Moving Average At 7-Year Lows

The big news this morning, eclipsing the downward revision on 1st Quarter GDP, is the fact that initial claims data hit 300,000 last week. And most importantly, the 4-week moving average of claims is at a 7-year low.

Adding layers of complexity is the news that GDP contracted due to slower than expected inventory growth. This is all setting up to create an inflationary trend in the second half of the year, caused by labor gains, economic growth, and draw-downs on inventory.

10 Year View of Claims Data

US 4-Week Moving Average of Initial Claims for Unemployment Insurance Chart

US 4-Week Moving Average of Initial Claims for Unemployment Insurance data by YCharts

5 Year Chart

A closer view of the data over a 5 year period shows the obvious downtrend, post-recession.

US 4-Week Moving Average of Initial Claims for Unemployment Insurance Chart

US 4-Week Moving Average of Initial Claims for Unemployment Insurance data by YCharts

Reading into this data, one might also want to look at the year to date data and compare this to weak GDP results. The most recent revised GDP figures from this morning show contraction in the economy with -1.0% GDP growth. Meanwhile claims data continued to drop.

US 4-Week Moving Average of Initial Claims for Unemployment Insurance Chart

US 4-Week Moving Average of Initial Claims for Unemployment Insurance data by YCharts

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