Jobless Claims Not in Recession Territory Yet

Initial jobless claims showed a 12K increase this week to 346K, bringing the four-week moving average up to 343K. Many economists watch the four week average as a leading indicator for economic weakness, and today's rise has some saying that a recession is becoming increasingly more likely.

Below we highlight the four-week moving average of initial jobless claims since 1967, with periods when the economy was in recession highlighted in red. We also note where the indicator was when the recession started. As shown in the chart, the current level of initial jobless claims remains below the levels it was at when the last four recessions began. While things could certainly get worse over the next several weeks, current levels of initial jobless claims are still not quite in 'recession' territory.

click to enlarge

Comments

[Smalltownba...:]

Care to take a wag at what those numbers would look like if you factored in all of the illegal aliens who cannot file jobless claims who have lost their construction, landscaping and day labor jobs in the last 12 months.

2007 Dec 21 09:44 AM

[Bruce Merri...:]

The U.S. has about 30 million incorporated businesses (up from 4.6 million in 1982) of which about 98% have less than 100 employees. The payroll data come from large companies which now account for only about 1/3rd of the U.S. GDP. Small business account for a rising 2/3rds of the GDP. But this is where the new jobs, new innovations and new household wealth are generated ($59 trillion up from $3 trillion in 1982, and up another $3 trillion in 2007) Since 1982, the U.S generated about 90 million new jobs, most of them in these small businesses, while losing about 40 million in downsizing and restructuring a whole bunch of famous corporate names. Our Labor Department data are no longer accurate, and the Europeans call this entrepreneurial revolution the "American Miracle."

2007 Dec 21 10:57 AM