Unemployment Claims Drop by 20% 14 comments
January 09, 2009
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First-time claims for unemployment have fallen by 20% in the past two weeks, contrary to widespread expectations that they would continue rising (click on chart to enlarge). Meanwhile, continuing claims for unemployment are at a new all-time high—so one explanation for the disparity would be that while companies may not be firing people at the same pace as before, those who have lost jobs can't find new ones, so things are still awful.Or so they say. This data may prove to be an anomaly, a mystery, or a sign that this recession is winding down—it's too early to say for sure. A glance at past recession experience suggests that big declines in claims typically do signal the end of a recession. And with the onset of recession catching most people by surprise, that's what usually happens when recessions end. For the time being I'm going to file this with the other indicators out there that are saying that the economy is slowly recovering.
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This article has 14 comments:
I hope the file is in the trash can.
No offense to the author of the article, but your comment made me laugh....
I would suggest that the stock market does not need an improving economy to go higher. It only need enough data to indicate things are no longer getting worse and a trough is at hand. Institutional investors will then 'look over the valley' and begin buying stocks more aggressively.
notsosmart, so sorry that you see a bonified leading economic indicator as a joke. Go study the 10 *leading* economic indicators and you will see that this is no riddle. Laugh all you want... the data is right there on the chart. That signature is a classic leading indicator of a job market on the mend. Perhaps you just need correctional lenses to make it say what you want.
chinooking, you are right this indicator is not meant to count those folks out of work, only those filing new claims. The filing of new claims is the "leading indicator," not the number to which you refer.
paultaut, looks a though your understanding is quite limited. I suggest you study the definition of "initial claims for unemployment." You might need that some day.
And bs_o_meter, do what you want with the data and your personal trash can. That's usually what folks do when they don't want to read valid data... they just ignore it. I would expect no less of you. There is no doubt however, that when the conference board files its report of leading indicators on the economy later this month, this one has just turned from negative in their last report to positive in their January compilation. Don't worry you need not go back to your circular file. The conference board can find and report the data just fine without your lost copy.
Pundit, looking forward to more indicators from the Beach! I am sure that the end of the recession will not catch you by surprise.
GNE
goodnewseconomist.com
Your condescending attitude towards myself and others is unwelcome.
GNE: But It appears that your own understanding is "quite limited" as well. Weather related constraints have pushed these recent numbers down. A few weeks of data do not extrapolate well into the future, Especially in a Graph depicting a 20 year timeframe.
Do you actually use 2 weeks of data to draw your own conclusions?
bs_o_meter's comment is apropos given that the Leading Index of Economic indicators has correctly forecasted 7 of the last 12 recessions, 1959-2001.
I assume you are familiar with Paul Samuelson's saying regarding Economists. "Economists have correctly predicted nine of the last five recessions."
While I agree that the economy is in a recession, flipping a coin would approximate the results provided by the Index of Leading Indicators over time.
Two weeks of data do not represent a trend. IMO
I would really like to know of any forecast that any Economist would make based on 2 weeks of data?
Elton Mast, Marketing, from your web site
The purpose of the GNE blog is to bring balance to what is a never ending diet of bad news in most media outlets... in good times and bad.
By most major media outlet's own admission their news is newsworthy if it is negative.
By contrast, there are now several of us blogging that are determined to bring some balance to the gloom and doom mentality of that editorial bias. I am not an economist and I don't play one on TV. I am a blogger, an editor and a commentator on the economy with a "good news" bias.
What I saw in this thread of comments was more of that negative mentality. And by your own admission, you read the headline only and commented in the negative against the author's headline.
Perhaps my comments were unwelcome by some. But I would note that the tone of the string of comments was profoundly dismissive of a leading economic indicator that has now turned positive.
And BTW, it's not two weeks of data that make up the leading indicator. The 4wk moving average now shows significant declines in claims -- off the highs of late November.
Eldon Mast
GNE
The unemployment data for October and November have been revised upward by 154,000. Most real economists interviewed expect the December report to jump by a similar amount for December alone when it is revised.
Weekly unemployment results are never revised, thats why a 4 wk. MA is used. But the Author himself doesn't know what to make of the figures for the last two weeks, the comments reflected this.
So instead of sticking to the Article, you decided to make negative comments on the Posters themselves. This puts you directly in the camp of the "Negative" Media.
Disagreeing with someone is one thing, ridiculing them is another. You could have disagreed without adding your own innuendos. IMHO