Thursday, August 13, 2009

Unemployment insurance claims takes a step backward, a wilting of the green shoot

Despite all the chattering that the recession may be over, the jobs front is still a source of despair. The rate of job loss has declined recently, but is still not anywhere near healthy. Unemployment insurance claims were mixed last week, with initial claims taking a step backwards, while continuing claims fell.

The 4-week moving average of initial claims rose slightly to 565,000, which is still well above the 300,000 level we would expect to see in a healthy economy. Although this one week of data is in the wrong direction, one week does not mark a trend change.

The 4-week moving average of continuing claims is down to 6,202,000, but that is well above the 2.5 million level we might see in a healthy economy. It is unknown how many continuing claims exhausted their benefits and are no longer counted, but "count" as a decline in continuing claims.

In short, the unemployment picture is gloomy, but trending in the direction of recovery. This trend remains a semi-healthy if slightly wilted green shoot.

-- Jack Krupansky


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