The four-week moving average of jobless claims fell to a fresh 15-year low this past week, a sign the economy is on solid footing, despite abruptly slowing in the first quarter. Bobbi Rebell reports.
More proof the job market recovery is solid. Jobless claims falling by a thousand to 264,000 last week. A rise had been expected. The four-week moving average of jobless claims dropped to a fresh 15-year low. Claims have been below 300,000 for 10 straight weeks. That threshold is associated with a strengthening labor market. Moody's Analytics John Lonski: SOUNDBITE: JOHN LONSKI, CHIEF MARKETS ECONOMIST, MOODY'S ANALYTICS (ENGLISH) SAYING: "The labor market is firming. The labor market is not getting worse. Unemployment is not rising, and, thus, the risk of a recession remains very low, and that is good news for the equity market and good news for the corporate bond market. " And stocks rallied on the news as did prices for U.S. government debt, while the dollar slipped against a basket of currencies. But despite the improving job market, the strong dollar and lower oil prices are keeping inflation under wraps. The latest data showing the producer price index - inflation at the wholesale level - fell by 0.4 percent in April. And that takes the pressure off the Fed for a bit longer says Lonski: SOUNDBITE: JOHN LONSKI, CHIEF MARKETS ECONOMIST, MOODY'S ANALYTICS (ENGLISH) SAYING: "There is no sense of urgency for a Fed rate hike. We just got this latest news on the PPI. You know, this reinforces the view that is now presented by the Fed Funds Futures contract wherein the first rate hike is not going to take place in September, its much more likely to take place in December, if it occurs at all in 2015. " One emerging area of concern as well he points out - retail. Recent data in the sector has been disappointing, as consumers hold back on spending.