Initial jobless claims had been in an almost relentless uptrend from the end of March through early August. Since then, they have completely reversed.

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This week initial claims declined another -6,000 to 222,000, and the 4 week average declined -7,500 to 233,000. Continuing claims, which lag somewhat, increased another 36,000 to 1,473,000, a 5 month high:

There was a little caterwauling on CNBC about the increase in continued claims. I am not concerned in the slightest. As I wrote above, they lag initial claims. They will reverse lower in the next few weeks.

Lower gas prices continue to bring lots of good short term news to the economy. I tipped off Menzie Chinn of Econbrowser to their correlation to consumer confidence and presidential approval, and he helpfully calculated their correlation, with graphs, in this post.

I want to caution that the long term outlook in next year remains negative; but as noted above, this takes the pressure off the short term.

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