Lowest Jobless Claims Since July 2008
Claims for jobless benefits dropped to the lowest level in ore than two years, falling below the crucial 400k level. The four-week average, which smooths out the data series, and fell to 414,000.
The traditional interpretation suggests that the U.S. labor market, which has been a headwind for the economy, is improving as the economy slowly accelerates into the new year. New applications for unemployment assistance decreased by 34,000 to 388,000 (week ending December 25th). That is the lowest level since July 2008.
How could I not make this our Chart of the Day?
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click for larger chart
Chart courtesy of Calculated Risk
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Here is the official US Department of Labor announcement:
“In the week ending Dec. 25, the advance figure for seasonally adjusted initial claims was 388,000, a decrease of 34,000 from the previous week’s revised figure of 422,000. The 4-week moving average was 414,000, a decrease of 12,500 from the previous week’s revised average of 426,500.
The advance seasonally adjusted insured unemployment rate was 3.3 percent for the week ending Dec. 18, an increase of 0.1 percentage point from the prior week’s unrevised rate of 3.2 percent.
The advance number for seasonally adjusted insured unemployment during the week ending Dec.18 was 4,128,000, an increase of 57,000 from the preceding week’s revised level of 4,071,000. The 4-week moving average was 4,120,000, a decrease of 37,250 from the preceding week’s revised average of 4,157,250.”
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December 30th, 2010 at 12:13 pm
Jobless claims pattern looks very similar to the 1990, 91, 92 real-estate recession and recovery.
Even the pop adjusted magnitude looks similar… with that recession peaking at just above 500k in weekly claims in early 1991 and this time the peak at 650k (20 years later, 30% higher, seems right in line with pop growth).
I thought that was interesting. Maybe USTs grind tighter next year against a steady ZIRP Fed (1993) but the next year is a bond market sell-off similar (but at much lower yields) to 94, as the Fed “normalizes”…. followed by…
December 30th, 2010 at 12:52 pm
Not to be Mrs. “Glass half empty,” but falling below 400,000 per WEEK in the week before Christmas is not exactly fantastic news. Can you feature the companies that pick that particular week to do their firing?
There are a couple of weeks in the year when I would expect firing to drop — this would be my chief candidate.
The downward trend is a different matter – of course that’s a good thing. If this past week turns out to have not been an anomaly, I will breathe easier.
December 30th, 2010 at 1:06 pm
That’s amazing. The GOP hasn’t even been sworn into power yet and already things are getting better! ;)
December 30th, 2010 at 1:11 pm
ummm..BR…keep and eye on The Big Picture please…..i don’t want to rain on your green shoots parade but…as I recall we saw a 4 wk moving trend decline in wkly claims before November’s nasty jobs report where unemployment rate ticked up and nfp disappointed big time……and next week we will probably see a repeat…need BP perspective
December 30th, 2010 at 1:33 pm
Last year’s Christmas-week number was only revised up 1,000 the following week. Fingers crossed.
December 30th, 2010 at 2:03 pm
But the REAL number of claims rose by 25K. Why no mention of this?
December 30th, 2010 at 2:07 pm
Recovery is a relative term when we look at the amount of stimulous injected. Three years of zero rates & QE1&2. What happens when the Fed lifts rates to 5%, last time that happened, things went into a tail spin. I guess things will be different this time.
December 30th, 2010 at 2:23 pm
Let us all agree to keep our inner Cassandra ‘in-check’ while pondering the this chart, and confirm that the overall trend is positive, yes? (Yeah, but what about the people unemployed for over . . . blah de blah de blah.)
If your looking to really get your gloom ‘on’, there’s the charts of yields on various European sovereign debt maturities, I suppose. Go, and fulfill your pessimism there.
December 30th, 2010 at 2:32 pm
While the jobless figures are generally improving, here’s a look at how the impact of joblessness varies with household income level, something that the monthly jobless claims figures do not reflect:
http://viableopposition.blogspot.com/2010/12/rich-keep-on-working-socio-economic.html
Those at the lowest socio-economic levels of American society are suffering from Depression era unemployment levels while the uppermost echelons of our society are feeling very little employment impact from the Great Recession. The division between the haves and have-nots in the United States is becoming a rather vast canyon.
December 30th, 2010 at 2:41 pm
Also, this moment of capitulation…
» The Moment of Convulsion
December 30th, 2010 at 3:44 pm
Jack, that is an incomplete quotation! You forget the bit right after Froot [sic] Loops, the bit about “. . . and the re-po squad turns up to haul away the Ford F-150 Raptor.”
That rather takes that whole “Grapes of Wrath” edge off of the fictional account, I reckon.
December 30th, 2010 at 4:20 pm
maybe. maybe not
http://www.nakedcapitalism.com/2010/12/we-speak-on-real-news-network-about-stimulus-and-tax-cuts.html
December 30th, 2010 at 4:47 pm
@Francisco Bandres de Abarca Says:
That’s the full quote from the last paragraph of the post. He used the same idea twice … once in the middle of the piece (which had the stuff about the Ford) and again at the end (where he doesn’t mention the Ford).
Ta-da.
=^.^=
December 30th, 2010 at 7:07 pm
Poor Lou Mish isn’t going to like that.
December 30th, 2010 at 8:44 pm
NOTE: The BLS is changing the long term unemployed eligibility from about 2 years to almost SIX years. That is going to produce some ugly numbers for the make believe la la land wall street types that can’t get it through their fat heads that we are in a depression.
But I do like to look on the bright side. I’m looking forward to hearing the news that Bernanke had to be implanted with a three lead heart pacemaker after a session with Ron Paul’s banking committee.
Also I expect to see CEOs playing miniatue golf, Exxon-Mobile having to lay off 25 congressmen and Wall Street renamed WALL MART STREET.
Happy New Year!
December 31st, 2010 at 9:11 am
At the risk of sounding like a grumpy grandpa, the seasonally adjusted number is not even close to the “real” number of people filing initial jobless claims. I’m not in a position to argue the merits of seasonal adjusting data however “real” numbers impact the economy while seasonal adjusted figure move the stock market.
For the week ending 12/25, the non-seasonally adjusted figure was 133,834 greater than the DOL magic wand headline figure. For the 1st four reporting weeks in December, the total non-adjusted claims are 438,743 greater than the magic wand figures. 439k additional people filing unemployment claims does have an impact on the economy.
Even the Nat’l Association of Realtors has mastered the seasonal adjustment magic wand. Their headline figure on Pending Home sales was UP 3.5% M-O-M while the “real”, not adjusted figure was DOWN 9.3% M-O-M.
Imagine the number of high school students who could become eligible for college scholarships once they figure out how to seasonally adjust their SAT.
Happy and safe New Year to All.