U.S. Job Losses Continue Piling Up

This morning's initial jobless claims number in conjunction with higher than expected CPI was disheartening as S&P 500 futures saw a prompt 10pt drop.  The US job market continues to weaken: there were 450k new jobless claims last week and the previous number was revised up from 455k to 460k.  The case for recession is getting stronger.  The chart below shows continuing claims, initial claims and the unemployment rate through the last economic cycle.  Changes during the two periods (2001 recession and '07 - '08 bear market) are shown below. 

While a change in the initial claim number doesn't mean as much, we are seeing that more people are losing their jobs.  The most interesting part of the chart is in 2001 where initial claims were flat while continuing claims rose, showing that as jobs were lost, none were gained.  On another note, the stock market bottomed in October of 2002, after the official end of the recession, but at the peak of the job losses.

click to enlarge

Comments

[Jason Rines...:]

Sign of a dying fiat currency, paper shuffling. Some got wealthy, but no real labor market strengthening occured. Government and Wall St just began waking up to the fact of 'no Main St. no Wall St.' Common sense is hard to find in the age of unreason.

2008 Aug 14 10:54 PM

[Tick Talk:]

iThinkBig has it right. Furthermore, the 06 - 07 employment lows are higher than the previous lows. Higher highs and higher lows are often referred to as an uptrend. In the case of these metrics, more joblessness equates to more misery.

2008 Sep 02 03:43 PM