Friday, October 12, 2012

Population-adjusted initial jobless claims and the unemployment rate

- by New Deal democrat

The St. Louis FRED recently updated their population data through August, so this is a good time to update my graphs of population-adjusted initial claims, which for 50 years have almost always moved in close tandem with the unemployment rate. Fist of all, here's the updated graph showing population-adjusted new jobless claims in blue compared with the unemployment rate in red:

Seen in this perspective, the sharp decline in the unemployment rate over the last year is hardly surprising.

Now here's the closer view dating from mid-2009, showing how closely the two series have moved in tandem since that time:

Since the population series ends in August, yesterday's suspect sharp decline in first time unemployment claims, as well as September's numbers are not shown. If, as I pointed out yesterday, there would have been a significant decline (e.g., to ~360,000) even with California's correct numbers, then population-adjusted claims will hit a new low shortly, which would be strong evidence that at very least the 7.8% unemployment rate in September is fully in line with the expected trend.