Weekly unemployment claims hovering at recession threshold

The weekly unemployment claims numbers were fairly decent yesterday, at least relative to how bad people worry things might be. Initial claims have been hovering near the 400,000 level which is traditionally the threshold for a recession. In recent months initial claims have been modestly to moderately above 400K, but yesterday they came in modestly below 400K at 390K. And, more importantly, the 4-week moving average has finally come down to an even 400K. That's not a sign of a coming boom, but it is not indicating a coming bust either. We are at least moving in the right direction. Still, we really do need to move well below that 400K level for at least a couple of months before we can give an "all clear" signal, on the unemployment initial claims front, even if the unemployment level is still quite elevated.

 

Just for the record, initial claims are 46K lower than a year ago when people thought the economy was doing fairly well (other than elevated unemployment.) And the 4-week moving average is 44K lower than a year ago. So, we are actually better off than a year ago, at least in terms of stabilizing the economy. How we are going to grow the economy to reduce unemployment is another matter, but mostly simply a matter of time.

-- Jack Krupansky