An article this morning titled ‘U.S. durable goods orders rise, jobless claims ease’ reports new orders for durable goods rose 1.9% in April, the biggest % gain December 2007, but concurrently March durable goods orders were revised sharply lower to -2.0% from the previously reported 0.8% decline.  In a separate U.S. Labor Department report initial claims for state unemployment insurance dropped by 13,000 to a seasonally adjusted 623,000 in the week ended May 23, falling for a second straight week.  That said, the number of people staying on benefit rolls after drawing an initial week of aid increased 110,000 to a higher-than-forecast 6.8 million in the week ended May 16.  A Baltimore ‘fixed income strategist’ is reported as saying “The data is consistent with the view that the rate of contraction is slowing, but we are still working our way through a recession. We haven’t hit a bottom yet”.  The article also says high unemployment, underscored by the Labor Department report showing that continued claims have set record highs in every week since January 24, indicate that any recovery after the recession will be painfully slow.

I would have thought that at some point durable goods orders would begin to rise as inventory levels should by now have to some large degree have worked their way out of the system.  Whether that will mean a return to work for some of the workers laid off in the past few months remains to be seen.  The number of people drawing unemployment insurance should come as no surprise to anyone.  The U.S. stock markets have responded to this news by losing a small amount of ground so far this morning.  I am continuing to look to the May U.S. job loss numbers as an ‘trend indicator’ of whether an end to the current recession is anywhere in sight.  I will report my thinking on that on this blog when the May job loss numbers are released.

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