Workforce Disruption: Weekly Claims Update

This is an updated version of a chart I've shown several times, and which I promised to post today in response to a reader's question. The chart shows weekly claims as a percentage of the workforce. That percentage dipped today to its lowest level for the year. Comparing the severity of this recession to others based on this metric, we are in better shape now than in the recessions of '74-'75 and '81-'82.

The economy is now about three months into a recovery with a workforce disruption metric that has fallen to 0.42%. It took almost one year of recovery for that same metric to drop to this level following the '81-'82 recession, and almost 18 months of recovery following the '74-'75 recession.

Comments

[tripleblack:]

Interesting. How does the much longer period of time when unemploymjent benefits are available - now vs then - reflected in this chart?

Logically, the push to search out a new job is much less now than then, too, because of the much longer span of time for benefits...

Oct 02 09:53 AM

[Tony Petroski:]

Mr. Beach Pundit: I need your optimism everyday to keep going.

What explains the downward trend in the chart (save the upward spikes)?

Oct 02 11:31 AM

[Stone Fox C...:]

High liquidity, easy money decades that led to low unemployment.


On Oct 02 11:31 AM Tony Petroski wrote:

> Mr. Beach Pundit: I need your optimism everyday to keep going.<br/>
>
> What explains the downward trend in the chart (save the upward spikes)?

Oct 02 01:03 PM

[bbro:]

Check out the NIPA Cash Flow accounts and you won't think the Market is overvalued....

Oct 02 03:01 PM

[frosty:]

"About 824,000 more jobs may be subtracted from the payroll count for the 12 months through last March when the figures are officially revised early next year, a Labor Department report showed today."

Also, "“We are probably still underestimating job losses,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “There could be another 30,000 to 40,000” that the data isn’t picking up."

Both from a Bloomberg article found at www.bloomberg.com/apps...

Unemployment is terribly high but is likely even much worse. Add to this that more severe measure which includes those forced to part-time work and those who have given up looking is nearly double the official unemployment rate, it is quite possible that the actual rate of formerly full time workers who are not now working full time is 20% of the workforce.

People who work spend money; people who work own homes; people who work drive our economy. This seems pretty simple to me. People who don't work don't spend money; people who don't work lose their homes; people who don't work are a drag on the economy. This also seems pretty simple to me.

Mr. Calafia is a great cheerleader but cheerleaders don't win games. We need to get the players back on the field for the economy to get back in the game.

Oct 02 03:18 PM

[174vishal:]

Have you adjusted your figures for the fact that the '74-'75 and '81-'82 recessions had increasing workforce while the current recession has a declining workforce? If not your conclusion is flawed, the percentage of wokers not included in the workforce has soared as a result your percentages look great. You need to base your calculations on a constant rather than a managed figure to provide comparable statistics.

Oct 03 07:01 AM

[David Van K...:]

It's misleading in the extreme to cut off the stripe that shows the current recession until the recession is "officially" declared to be over by NBER (National Bureau of Economic Research). I'm sure all of your other recessions stripes on the chart are based on NBER's dating. Your own declaration that the recession is over doesn't make it so.

Oct 03 02:40 PM