As we move beyond the market panic, we can zero in on the data that define the economy. Employment is one of four key areas that define the economy — the others being production, earnings growth and consumer spending.
So, jobless claims give us a good week-to-week gut check on the employment situation. As you know from my post “The Economy’s Four Horsemen“, its the magnitude of the data change which is most important to watch. Jobless claims came in at 461,000 for the previous week, down from 477,000 the week before. That brings the 4-week average claims to 483,250, which is 161,500 more than last year.
While the one-week number of 461,000 is positive and reflects a decrease in hurricane-related jobless claims, the year-on-year figure is consistent with recession. Continuing claims confirm the weakness of the overall data. Continuing jobless claims for last week were 3,711,000, bringing the four-week average to 3,632,000 up 1,080,250 from last year.
When we start seeing a consistent and large decrease in these year-on-year comparisons, we will know that the employment outlook is starting to improve. However, we have not reached that point. Comparisons are still bleak.
Source Unemployment Insurance Weekly Claims Report, US Department of Labor
Originally published at Credit Writedowns and reproduced here with the author’s permission.