The four-week moving average of new claims for state unemployment insurance is one of the eleven indicators that make up the Department of Commerce Composite Index of Leading Economic Indicators (LEI). A month-to-month decline in the four-week moving average makes a positive contribution to the LEI and vice-versa. After an extended decline, this indicator turned up on June 1 and has been on the rise ever since.

In a related story, the Conference Board announced today that help-wanted advertising in May had declined. The May reading of the board's advertising index was 80. This was down 2 from the April number and down 1 from the index value in May 1995. The board's index is based on data from monthly surveys of advertising in 51 major newpapers all over the country.

The board reported further that, in the three-month period ending with May, help-wanted advertising had fallen in seven out the nine geographical regions it surveys. A decrease of 7.5 percent was registered in both the Mountain and West North Central regions. Ads fell by 5.7 percent in the Middle Atlantic region and 3.6 percent in the West South Central region.

Both of these reports provide further confirmation that the recent unemployment rate readings, which have been hovering around 5.5 percent, are indicative of a state of "full-employment" unemployment. So, perhaps the recent increase in economic activity will turn out to be a somewhat self-limiting phenomenon. Everyone who wants to work already has some sort of job, so there are few potential employees available to support further business expansion.

Byline: Lafferty (MF Merlin)