by Calculated Risk on 8/17/2006 11:33:00 AM

Here is some good news. A few weeks ago, Bernanke expressed concern about initial claims rising:

"Gains in payroll employment in recent months have been smaller than their average of the past couple of years, and initial claims for unemployment insurance have edged up. These developments are consistent with the softening in the pace of overall economic activity that seems to be under way."

I presented a graph of initial claims at that time.

Click on graph for larger image.

Here is an updated graph of initial claims for unemployment insurance (four week average) including the Labor Department's report today.

Initial claims have been steady for the last couple of months.

And on oil: There was a brief increase in the spot price of oil to $78 per barrel, earlier this month, after BP announced a major Alaskan field shutting down. Since then, the news had improved and the price of crude oil has fallen almost ten percent: Good news triggers oil price fall

Oil prices have fallen to their lowest level in nearly two months as the continuing ceasefire in Lebanon and healthy US stockpiles calmed markets.

Traders said BP's decision to continue oil production from parts of its Prudhoe Bay field in Alaska had also triggered the price movement.

Brent crude was trading down 97 cents at $71.86 a barrel while US light, sweet crude slid $1.12 to $70.77.

Despite the drop, prices are still 14% higher for the year as a whole.
...
A series of positive developments in recent days have boosted sentiment, which had previously been hit by the conflict in Lebanon, kidnappings of foreign oil workers in Nigeria and BP's problems. The troubles had sent Brent prices to a record high above $78 a barrel.

Some of the factors and disruptions that helped drive us to very high levels have been resolved now
...
On Wednesday, the US energy department reported higher-than-expected oil inventories of 331 million barrels.

Stockpiles fell by 1.6 million barrels in the week ending 11 August but the reduction was less than expected given the closure of part of Prudhoe Bay, the largest oil field in the US, due to pipe corrosion.

Inventories remain at almost their highest level since 1999.

Jobs are the key to achieving some sort of soft landing, so the trend in initial claims is definitely good to see. Unfortunately, I think the layoffs in housing related fields have just starting.

And falling oil prices are welcome news and will hopefully offset some of the impact from the housing bust. Two pieces of good news today.