Thursday, February 22, 2018

Initial jobless claims: the single most positive aspect of the entire economy

 - by New Deal democrat

I haven't been bothering to comment on initial jobless claims reports lately, for the simple fact that every week it's the same story:  they're good! In fact, the initial jobless claims reports are probably the single most positive aspect of the entire economic expansion.  For all intents and purposes, nobody is being laid off!

For initial jobless claims even to be giving a "caution signal" about the economy, I would need the YoY comparison to increase:

Note that this frequently but not always happens several years in advance of any downturn.  By contrast, current numbers are running on the order of 5% less than last year.

One dismissal that it occasionally heard is that the number is bogus because there are fewer "covered employees," i.e., employees entitled to make a claim for unemployment benefits, in this expansion than previously.

While the absolute numbers of employees who are not covered has grown, as a percentage of all employees the share in this expansion is similar to that of the last few expansions:

So, what happens to initial jobless claims if we norm by the percentage of covered employees?  This:

The number is still at multi-decade lows. but would be more on the order of 250,000 per week than 225,000 per week. Still very good for workers.