Ignore The Weak GDP Report. Just Pay Attention To The Strong Initial Claims Report

The first revision of Q1 GDP came in at 0.1%, which is an improvement from the initial reading of -0.1%, but which was still below the 0.5% that analysts had expected.

The other economic report was initial jobless claims, which fell to 344K from 362K. Analysts had expected 360K.

GDP is a much bigger report, but we'd argue that the claims number is more important.

For one thing, GDP is old. Not only is Q4 last year, it's encompasses a whole quarter, so we're still getting data from last October.

Second, initial claims is very important, because the economy is in a state of concern right at this moment. Everyone's worried that the end of the payroll tax holiday will slow down the economy. And of course the sequester is right around the corner.

If you want to know what's happening now, focus on that weekly claims number. GDP is interesting, but it's old and no longer reflective of the latest cross-currents.