Simply put, that is a great looking chart. It tells us we are in a trend of declining job cuts. It also bodes well for the future. Combine that with this chart:
From the DOL:
In the week ending May 30, the advance figure for seasonally adjusted initial claims was 621,000, a decrease of 4,000 from the previous week's revised figure of 625,000. The 4-week moving average was 631,250, an increase of 4,000 from the previous week's revised average of 627,250.
While the 4-week number increased, the week over week decreased. In other words, it still looks as though the front-end of the employment situation is getting better. However, there are still major issues out there on the employment front. "But the alarming news in the report was a sizable 110,000 jump in continuing claims for the May 16 week. The gain was the 19th in a row and at 6.608 million sets another record high."
In addition, consider this chart from Calculated Risk:
Notice that initial claims are near the high level established in the early 1980s. While past performance is no guaranty of future performance, it is interesting that we're at the same level.
3 comments:
How will the continuing claims figures be affected by those running out of benefits? Could this produce an artificial decrease or leveling off?
Except for retail sales, the economic numbers look good. I wouldn't be surprised if six months from now, the NBER declares that the recession ended in May or June.
Many have written about the relationship 'initial unemployment claims' and the 'end of recessions'.
However, today your chart showing “initial claims (4 week moving average)” and “continuous claims" shows that the current jobs situation is unique to past recessions at least since 1971. There has never been such a large gap between “continued claims” and Initial claims average.
Also, historically both variables peak at close to the same time. Until the ‘continued claims’ turns down the ‘initial claims average’ is not a significant predictor of recessions’s end – it seems to me.
I would be interested in what you think especially about the unhistorical gap between the variables.
Thank you
Tom
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