US Jobless claims fall to 453,000; decline in line with past cycles
In the week ending Sept. 25, the advance figure for seasonally adjusted initial claims was 453,000, a decrease of 16,000 from the previous week’s revised figure of 469,000. The 4-week moving average was 458,000, a decrease of 6,250 from the previous week’s revised average of 464,250.
Unadjusted claims are lower at this time of year, now under 400,000 for three consecutive weeks. Jobless claims are coming down, but at a snail’s pace. For example at this time last year unadjusted claims were running at 430-450K versus the 340-380K we see today. The reduction in the four-week average jobless claims in that year is 71,150.
The key, however, is that the year-on-year change in claims is going down very quickly. For example, in April the decline peaked at 183K, falling to about a 100K decline in July to the present 70K. Should we be worried? Not necessarily. Last cycle, we never got that powerful a kick in jobless claims reduction, the numbers only reached the best year-on-year comparisons in April 2004 at -80K. By comparison, in the aftermath of the 1990-91 in the US, the best year-on-year comparison was –183K in January 1993. They also fell quite quickly to only a 70K reduction by April 1993.
To me, this says that the jobless claims numbers are not really that much out of line with the past two cycles of jobless recoveries. Bottom line: the jobs picture in the U.S. is still pretty weak with initial claims averaging a recessionary 458,000. Nevertheless, the numbers are still in line with a weak recovery at this point in the cycle.