While there was a slight spike upward in initial jobless claims, the four week moving average has dropped to its typical post-recession low of about 300,000. Unfortunately, the unemployment rate remains well above what it should be at this point in the recovery:
This is problematic because this recovery is running its course. Examine the initial claims chart and see for yourself. The bottoming out of claims, indicated by the red ellipses, typically indicates a turn in the business cycle. Perhaps the low claim number indicates “strength” as the article tells us, but when you place this number in context with the other data it becomes apparent that the economy is close to peak recovery.
It seems that this year’s calendar pumped up August statistics because part of Labor Day weekend fell in the month, which is unusual. Data like auto sales, pmi’s and now nmi’s logged declines in September as activity was dragged into August. What this means is that everything will level out, and the service sector will continue its tepid growth trend with index readings between 53 and 56. Of course, if the shutdown/debt limit catastrophe drags on, numbers will be much lower in October followed by a November recovery.