The U.S. Department of Labor released the Unemployment Insurance Weekly Claims Report showing that initial jobless claims decreased 10,000 in the latest week to 570,000 from an upwardly revised 580,000 the week prior. The 4-week moving average is now 566,250, less than 100,000 off the April peak.
Since the week ended Jul. 18, the average initial claims figure has been hovering in the 560-570,000 range. So, this marks six straight weeks during which we have seen no discernible improvement in the employment picture painted by jobless claims data.
It is now 20 weeks since initial jobless claims peaked and we are shedding only 92,500 fewer jobs. I found this quite worrying until I compared it to previous recession, demonstrating that the last two jobless recoveries had a similar dynamic. Even in the recessions of 1970 and 1974-75, jobless claims were slow to fall.
Below is a comparison of the 20-week fall during previous recessions:
- 2001: 92,750. Oct. 20, 2001 peak of 489,250 vs. Mar. 9, 2002 figure of 396,500.
- 1991: 68,500. Mar. 30, 1991 peak of 501,250 vs. Aug. 17, 1991 figure of 432,750.
- 1982: 185,500. Oct. 9, 1982 peak of 674,250 vs. Feb. 26, 1983 figure of 488,750.
- 1980: 179,750. May 31, 1980 peak of 629,000 vs. Oct. 18, 1980 figure of 449,250.
- 1974: 61,250. Feb. 1, 1975 peak of 560,750 vs. Jun. 21, 1975 figure of 499,500.
- 1970: 25,250. May 9, 1970 peak of 343,750 vs. Sep. 26, 1970 figure of 318,500.
If one looks at these numbers in percentage terms, the fastest job recovers in order are:
- 1980: 28.6%
- 1982: 27.5%
- 2001: 19.0%
- 2009: 14.0%
- 1991: 13.7%
- 1974: 10.9%
- 1970: 7.3%
So, contrary to my expectations, the fall in unemployment claims is very much in line with what we have seen in recessions over the previous 40 years.