Three positive economic reports released on Thursday indicate progress in the four-year struggle toward economic recovery. Thursday brought three positive economic reports and one negative report from the Kansas City Federal Reserve .  The Kansas City Fed released the third negative regional Fed report after the Empire State Manufacturing Survey and the Philly Fed Business Outlook Survey.  Although economists had been expecting to see an increase to positive 2 from negative 1 in December, the January report described conditions as “relatively unchanged” – although there was a slight dip to negative 2.  All of the regional Fed surveys are somewhat subjective – as is the case with many economic reports, based on surveys of how people feel about economic conditions. One report which always deals with hard numbers is the Department of Labor’s weekly report on initial unemployment claims .  Thursday’s report revealed that weekly initial claims had dropped to their lowest level in five years.   A New (Temporary?) Glitch in the Jobless Claims Data From the report: In the week ending January 19, the advance figure for seasonally adjusted initial claims was 330,000, a decrease of 5,000 from the previous week’s unrevised figure of 335,000.  The 4-week moving average was 351,750, a decrease of 8,250 from the previous week’s revised average of 360,000. Weekly Unemployment Claims Again Drop Dramatically The steady decrease in unemployment claims became an important basis for the upbeat findings discussed by The Conference Board in its December Leading Economic Index report.  The Leading Economic Index (LEI) rose 0.5 percent in December to 93.9 (2004 = 100), following no change in November, and a 0.3 percent increase in October. From the report: Says Ataman Ozyildirim, economist at The Conference Board:  “The U.S. LEI rose sharply in December, led by a large improvement in initial claims for unemployment insurance and positive contributions from the interest rate spread and the Leading Credit Index™.  The increase in the LEI brought its six-month growth rate well above zero, with roughly two-thirds of the components advancing in the last six months.  However, consumer expectations and manufacturers’ new orders remain weak.” Says Ken Goldstein, economist at The Conference Board:  “The latest data suggest that a pickup in domestic growth is now more likely, compared to a few months ago.  Housing, which has long been a drag, has turned into a positive for growth, and will help improve consumer balance sheets and strengthen consumption.  However, for growth to gain more traction we also need to see better performance on new orders and an acceleration in capital spending.” Markit Economics, which has been providing Purchasing Managers’ Index (PMI) reports worldwide, has recently been competing with the Institute for Supply Management (ISM), which was formerly the sole publisher of PMI data in the United States.  Each month, Markit releases a “flash” PMI report ahead of its final version, which arrives later in the month.  The Markit Flash U.S. Manufacturing PMI report for January indicated a rise to 56.1 from December’s 54.0.  A reading above 50 signals expansion. The major ETFs expected to respond to Thursday’s four economic reports are: Industrial Sector SPDR ETF (NYSEARCA:XLI)  +0.60% SPDR S&P Retail ETF (NYSEARCA:XRT)  +0.85% Consumer Staples Select Sector SPDR ETF (NYSEARCA:XLP)  +0.22% Consumer Descretionary Select Sector SPDR Fund ETF (NYSEARCA:XLY)  +0.76% iShares Russell 2000 Index ETF (NYSEARCA:IWM)  +0.33%  Learn More About iShares ETFs Bottom line: As initial unemployment claims continue to decline, we are seeing expanded consumer demand, which drives 70 percent of the American economy.  We are now seeing the results in the Leading Economic Index and the PMI data. Sign up for Wall Street Sector Selector’s FREE Stock Market Timing Indicator!    Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector’s Disclaimer , Terms of Service , and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.