Thursday, April 03, 2008

Unemployment initial claims finally rise above 400,000

Finally we see unemployment insurance initial claims rise above the 400,000 level to 407,000. The 400,000 level is usually the level associated with recession. That said, one week does not establish a trend and the more-reliable 4-week moving average of initial claims rose to only 374,500.

For comparison, the 2001 recession lasted from a "peak" in March 2001 to a "trough" in November 2001 )8 months), according to the National Bureau of Economic Research (NBER), the "official" arbiter of dating recessions. The highest initial claims number in March 2001 was 393,000. It was not until the week of April 21, 2001 that initial claims reached 400,000 and then 406,000 in the week of April 28, 2001.

But also note that initial claims bounced above the 400,000 level through the week of September 6, 2003 (422,000), almost two years after the recession had "officially" ended.

-- Jack Krupansky

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