Thursday, April 10, 2008

Mixed data on the unemployment front

Once again the weekly unemployment insurance initial claims report confuses people. Last week it suddenly "spiked" above the recessionary level of 400,000, but this week it retreated by more than the amount of the spike. It has been noted that some of the spike may have been due to the timing of the Easter weekend. That is the good news. The bad news is that the four-week moving average of initial claims, the more reliable number, inched higher again. That average, 378,250, is certainly elevated, but still not at the level one would expect in a full-blown recession. Continuing claims also inched higher. So, we do have some warning signs, but there is nothing here to indicate that we in the middle of a full-blown recession.

In short, the elevated level of initial claims suggest that we may be at the edge of a recession, but you will have to look elsewhere if you want evidence that we are in a full-blown recession.

-- Jack Krupansky

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