Thursday, September 03, 2009

Unemployment insurance claims remain a stagnant wilted 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. Initial claims did fall modestly, but the 4-week moving average rose by the same amount. Continuing claims rose moderately, but the 4-week moving average declined modestly. A classic mixed bag. Call it a wilted green shoot.

The 4-week moving average of initial claims rose modestly to 571,250, which is well above the 300,000 level we would expect to see in a healthy economy.

The 4-week moving average of continuing claims is down to 6,216,000, 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 has stagnated. This is to be expected at this early stage in a recovery, where businesses are still struggling to cut costs and the bulk of the impact of government stimulus is still off in the future.

-- Jack Krupansky

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