One week after initial unemployment claims fell to their lowest level in five years, the latest figure brought a return to last year’s awful rate. On January 10 , we lamented that no progress had been made in reducing unemployment.  There had been 371,000 initial claims filed that week, which was consistent with the totals that had been reported exactly one year earlier.  Suddenly, on January 17 , the number if initial claims dropped to 335,000 – the lowest level since January of 2008.  By the following week, on January 24 , we thought we were making solid progress.  The total number of initial claims was down to 330,000 – its lowest level in five years. Unfortunately, the latest (January 31) report from the Department of Labor revealed that 368,000 initial claims had been filed for the week ending January 26.  Unfortunately, the rate of unemployment has fallen back to last year’s pace.  The following is a list of totals for the three-week period from this time last year: Jan. 21, 2012   372,000 Jan. 28, 2012   381,000 Feb. 4, 2012     371,000 Although 368,000 is a few thousand short of those levels, it is within the margin of error, so that we may find on next week that the revised figure for initial claims for the week ending January 26 might easily be 372,000.   Weak Employment Data Does Not Deter Oil, Copper From the report: In the week ending January 26, the advance figure for seasonally adjusted initial claims was 368,000, an increase of 38,000 from the previous week’s unrevised figure of 330,000.  The 4-week moving average was 352,000, an increase of 250 from the previous week’s unrevised average of 351,750. Fortunately, the Bureau of Economic Analysis had some good news for us in the form of its Personal Income and Outlays report for December .  Economists had been expecting to see a 0.7 percent increase in personal income during December, as well as a 0.3 percent increase in personal spending.  Instead, personal income has surged by a whopping 2.6 percent in December.   Personal Income Surges in December on “Special Payments” From the report: Personal income increased $352.4 billion, or 2.6 percent, and disposable personal income (DPI) increased $331.3 billion, or 2.7 percent, in December, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $22.6 billion, or 0.2 percent.  In November, personal income increased $135.8 billion, or 1.0 percent, DPI increased $125.5 billion, or 1.0 percent,and PCE increased $41.6 billion, or 0.4 percent, based on revised estimates. Real disposable income increased 2.8 percent in December, compared with an increase of 1.3 percent in November.  Real PCE increased 0.2 percent, compared with an increase of 0.6 percent. The Chicago Purchasing Managers Index is also known as the ISM-Chicago Business Survey, the MNI Chicago Report and the Chicago Business Barometer.  On Thursday, the ISM Chicago released the  Chicago Business Barometer for January .  Although economists had been expecting to see the index decrease to 50.5 from December’s 51.6, the index jumped to 55.6 in January.  Production and new orders rose to 10-month highs and the employment figure rose to its highest level since June of 2012.  Five of the seven barometer indices advanced, with the supplier deliveries and prices paid indices still at contractionary levels. The major ETFs expected to respond to Thursday’s economic reports are: Industrial Select Sector SPDR ETF (NYSEARCA:XLI)  -0.35% Consumer Staples Select Sector SPDR ETF (NYSEARCA:XLP)  -0.14% Consumer Discretionary Select Sector SPDR ETF (NYSEARCA:XLY)  -0.48% SPDR S&P Retail ETF (NYSEARCA:XRT)  +0.95% iShares Russell 2000 Index ETF (NYSEARCA:IWM)  +0.69%     Learn More About iShares ETFs Bottom line:  Although the rate of initial unemployment claims relapsed to last year’s awful level after reaching the lowest level in five years, there was good news in the Personal Income and Outlays report as well as the Chicago PMI – which indicated that its employment index rose to its highest level since June of 2012.  The data demonstrates that although progress is being made toward economic recovery, we are still hitting some ruts. 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.