Seasonally-adjusted initial jobless claims came in at 639,000, down significantly from 670,000 the week before. 650,000 was expected. This is one positive in a sea of bad news regarding the employment market. It does not mean that tomorrow’s unemployment number will be good. Expect a job loss number in the 600- to 700,000 range.
This week, I also wanted to look at how this data compares to previous data on an indexed basis because the level of covered employment has increased dramatically since it was first collected in 1971. Back then, 53 million people were covered Now, nearly 134 million people are covered. So, clearly some indexation is in order.
Below, you are looking at the 12-month change in (unadjusted) initial jobless claims indexed to July 1990. However, I should caution that this is a bit of an apples to oranges exercise because the U.S. employment base was more geared to manufacturing and the business cycle was more volatile in downturns before 1990. This means that one should expect relatively higher numbers on an indexed basis all things being equal. And the data set bears this out.
Nevertheless, it is crystal clear from this graph that this recession is much worse than anything we have seen in the U.S. since 1974, eclipsing even the 1980-1982 period when layoffs were extremely high.
Source
Unemployment Insurance Weekly Claims Report – U.S. Department of Labor