In the week ending the 25th of May, US initial jobless claims rose unexpectedly. Initial claims rose from an upwardly revised 344 000 to 354 000, while the consensus was looking for a stabilization at 340 000. The less volatile four week moving average rose significantly too, from 340 500 to 347 250, the highest level since April, when claims were distorted by the Easter holidays. The Labour Department added that claims for five states were estimated, as the holiday-shortened week prevented full data tabulation. Also the Oklahoma tornado could have had an impact, although the Labour Department said that nothing had come in so far. Due to these factors, it is difficult to draw firm conclusions from the figures, which will probably remain the case next week, when the week under calculation will include Veteran’s Day. Nevertheless, we still believe that the underlying trend in claims remains slightly down, pointing to a further gradual improvement in the US labour market. Continuing claims, which are reported with an extra week lag, edged up too. In the week ending the 18th of May, continuing claims rose by 63 000 to a total of 2 986 000.



EMU: EC’s confidence shows broad-based pick-up


After two consecutive monthly declines, European Commission’s economic confidence picked up in May. The headline index rose from 88.6 to 89.4, exactly in line with expectations. The details show that the improvement was led by services (-9.3 from -11.1) and retail (-16.8 from -18.4) confidence, while industrial confidence (-13 from -13.8) and consumer confidence (confirmed at -21.9 from -22.3 in April) picked up slightly. Only construction sentiment weakened during the month, from -31.7 to -33.6, probably due to poor weather conditions. The national data show that strength was broad-based across countries. Economic confidence increased sharply in Greece (93.8 from 89.2), Cyprus (75.1 from 64.4), Portugal (84.2 from 82.4), Belgium (89.7 from 88.4) and Italy (84.9 from 83.4). More limited improvements were registered in Germany (98.7 from 98.1), Spain (89.8 from 89.7), France (87.3 from 86.4), the Netherlands (88.6 from 87.4) and Austria (92.1 from 91.7). After already stronger than expected PMI’s and the German IFO, this outcome provides further indications that the euro area economy is starting to recover. In the previous months, the hard-hit southern countries showed already signs of improvement, but now it is an encouraging sign that the also core countries are picking up. It is still early days and these green shoots need to be confirmed in the coming months, but it might an indication that the euro area could return to growth in the second half of the year.