Additionally, the four-week moving average fell to 523,750. This is the 4th week in a row that the more stable 4 week average has been ~20% less than the peak number in April of 659,000.
One speculation of mine has been that, while Calculated Risk may be proven correct that temporary holiday hiring might not materialize this year, seasonal layoffs -- which are an even bigger trend -- might not materialize either, as employers "hoard" jobs in the face of increasing demand. A look at the initial claims data, non-seasonally adjusted, which is trending higher at a much slower than usual pace, suggests that is exactly what is happening.
While most bloggers, including notable economists, think that jobless claims must fall all the way to 400,000 before we begin to see actual job growth, my examination of past severe recessions from the '70s and early '80s (which saw growth despite more than 500,000 new layoffs a week) causes me to believe that we only need about one more month of claims at this level of 20% or more off peak to be consistent with net employment growth in the economy.
It appears we will soon find out. In the meantime, early next week I plan on updating my series asking "When will the Economy Add Jobs?" with the new data.
Initial jobless claims are clearly on the decline, down 20,000 in the Oct. 31 week to 512,000 (prior week revised 2,000 higher to 532,000). The four-week average is down for the ninth straight week, 3,000 lower at 523,750 for a 25,000 decrease from late September. Continuing claims are also declining but here the change is likely a negative, due largely to the expiration of benefits. Continuing claims, in data for the Oct. 24 week, fell 68,000 to 5.886 million for the seventh decline in a row. The unemployment rate for insured workers is unchanged at 4.4 percent, a level that is down 8 tenths from a peak in late June. In contrast, the overall employment rate has continued to climb, at 9.8 percent in September and is expected to increase another 1 tenth in Friday's data for October. Remember, improvement in both initial and continuing claims during September did not correlate to improvement in either payrolls or the household survey.
Here is the accompanying chart:
Note the 4-week moving average has been dropping since late April/early May. That's a clear trend.