The LEI for March increased by 0.4 percent, which was better than expectations and led by the continued plunge in initial unemployment claims. According to Sonders, “the gain in March was sufficient to get the LEI back up above the September 2018 high and further ease near- to medium-term recession concerns.” Although the March reading did slightly beat last September's high, Sonders noted that it's been in a fairly flat trend since then.

The Conference Board specifically noted in its release that the “weaknesses and strengths among the leading indicators have become equally balanced over the last six months.” In fact, in this most recent six-month stretch, the LEI's 0.4 percent rise was much slower than the 2.8 percent growth during the prior six-month stretch.

While the uptick in the trend in initial unemployment claims may have led to March's increase, Sonders said, “there are a few caveats worth noting with regard to the celebratory aura surrounding claims' downside breach of 200k.”

Until the LEI's latest release, initial unemployment claims had been in a worsening trend. “Yes, the fewest people in nearly 50 years filed for unemployment insurance in the past couple of weeks, but it's not solely due to the tightness in the labor market,” Sonders wrote. According to Sonders, many states have imposed stricter rules on their unemployment insurance programs—including making it harder to qualify, reducing the duration of benefits, and cutting payouts.

According to a recent AP report, 30 percent of people out of work in the United States now receive unemployment insurance, down from about 40 percent before the Great Recession.

From: ThinkAdvisor