Initial jobless claims dropped 6,000 to 403,000 during the week ended October 15. The 4-week moving average of initial jobless claims (403,000) is the lowest since the week ended April 23, 2011. That said, initial jobless claims are still holding at a worrisome level. In other words, a large drop in initial jobless claims is necessary to say that the worst is behind us. Continuing claims, which lag initial claims by one week, rose 25,000 to 3.719 million.

In other related economic news, the Conference Board’s Index of Leading Economic Indicators (LEI) rose 0.2% in September vs. a 0.3% gain in August. Of the ten components, real money supply, Treasury yield curve spread, and consumer expectations advanced, while the average workweek held steady. The other six components were posted declines. The real money supply and interest rate spread components of the index have been partly distorted and have reduced the ability of the index to explain the status of economic conditions.

The October factory conditions survey of the Federal Reserve Bank of Philadelphia points to improving conditions. Indexes tracking current conditions, new orders, and shipments moved up after posting negative readings in August and September. The national factory survey will be published on November 1.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

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