I mentioned a couple of posts ago that the US data were surprising on the upside and that revisions were to the upside too. These are usually signs of a strengthening economy. Over the next few days we'll get a slew of new data: the labour market indicators and the ISM indices.
While the unemployment rate lags the cycle, the change in the unemployment rate coincides with the cycle. You have to invert it, because unemployment falls as the economy recovers. You can see from the chart below how strong this indicator now is, after the mid-cycle correction associated with the aftermath of the Japanese earthquake and tsunami.
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Similarly, the change in payrolls is also improving, as the chart below shows. Nowhere near fast enough, given the slump during the GFC, but still -- improving.
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| Click to enlarge |
Meanwhile, housing appears to have finally turned the corner. But more of that tomorrow.
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