Jobless claims report: Where's the economic weakness?

Jobless claims last week unexpectedly fell to 293,000, down 5,000 from the previous week. Economists had been expecting that the weakness in housing would spread to other parts of the economy. However, this latest report indicated that they may be waiting for quite some time.

This report seems to also clearly support the Fed's position that the subprime mortgage crisis is largely contained and is not spreading to the rest of the economy. Dr. Bernanke described this in detail in a speech that he made today. The Philly Fed Report also came in better-than-expected.

The combination of the Bernanke speech, the Philly Fed report and the Jobless Claims report also seemed to put cold water on any hopes by Wall Street for a rate cut in the near future. The economy is still slowing, however, slow growth is still growth. It is not the beginning of a recession which would necessitate substantial rate cuts.

Chairman Bernanke has made it abundantly clear that he will let the economic data dictate changes in the Fed's position rather than anticipating the changes. Wall Street would be well advised to remember this point. It is much more profitable to follow rather than to fight the Fed.

Doug Roberts is the Founder and Chief Investment Strategist for FollowtheFed.com, an investment strategy that uses the Federal Reserve's impact on the stock prices. He previously held executive positions at Morgan Stanley Group and Sanford C. Bernstein & Co.