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Weekly Initial Unemployment Claims

Dave Rosenberg, Chief Economist with Gluskin-Sheff (Canada), has an interesting chart of weekly initial unemployment claims for the current and the two immediately preceding recessions.  You can read Dave's entire dicussion here.  His central point is that the claims level dropped below 500,000 at the end of the two earlier recessions.  The inference is that the same should happen this time.



I liked this chart for a different reason; it shows how different this recession is from the prior two.  Not only has the peak in claims been much higher this time, the width of the peak is dramatically larger, creating a significantly larger "area under the curve".  This area is proportional to the magnitude of the economic impact produced by unemployment.  When this is combined with the persistence in the length of time in unemployment (much longer than any previous recession since World War II), the magnitude of labor contraction in this recession becomes clear.

There is no surprising news here for most of us, but looking at the data is anchoring.