US unemployment claims rise, labor market is weak
U.S. jobless claims registered an increase to 455,000, bringing the widely followed 4-week average to 445,000, its highest level since 2002. Recently, the jobless claims numbers have been creeping up indicating the labor market in the U.S. is contracting. This particular report does not change that outlook.
Starting in late June, jobless claims exploded, going from the high 300,000s to over 440,000 by early September. Most economists look at 400,000 jobless claims as a red flag for a recession. I tend to look at the year-to-year comparisons, where large increases have been remarkably accurate in predicting prior recessions.
With initial claims now more than 100,000 and continuing claims well above 800,000 over the numbers at this time a year ago, it is obvious that the U.S. labor market is weak and deteriorating.
Chart of the day: unemployment as a recession indicator – 12 Sep 2008
Jobless Claims down, continuing claims way up – 11 Sep 2008
U.S. unemployment hits 5-year high of 6.1% – 5 Sep 2008
Chart of the day: 5 Sep 2008 – change in unemployment – 5 Sep 2008
Are U.S. jobless claims telling us something? – 4 Sep 2008