The U.S. Department of Labor
Commerce Departmentsays new jobless claims last week fell 34,000 to 601,000. That's the lowest figure since Jan. 24, and way less than the 635,000 economists expected.
A clear turn is now visible in the claims numbers. The eight-week moving average has now fallen for for straight weeks, and the four-week average has dropped by 36K from its early April peak.
This is too big a move just to be noise. Claims can probably fall a good deal further before they hit the wall; they surged by 200K as companies panicked in the six months after the Lehman bust. With activity now apparently bouncing as fear of another Lehman fades, layoffs will drop sharply. But a sustained fall to the sub-350K pace consistent with strong growth is still a very long way off. That requires household deleveraging and healthy banks, and that's not a story for this year.
We're getting there. Planet Money is spending much of the morning sitting around a table in a heavily guarded room, where we'll be critiquing past podcasts and the blog. The Treasury is expected to release whatever news we don't already know about the banks' stress tests — thanks, Calculated Risk, for keeping score — so we'll leave you for now with this comforting headline from the LA Times:
"Big banks' 'stress test' results to be reassuring, Geithner says."