Jobless Claims Are Finally Encouraging Again

On April 1 the US Department of Labor told us that the number of people filing first-time claims for unemployment insurance fell to 439,000 for the week ended March 27. That matched the level for the week ended February 6.

Both of these were the lowest since the week ended August 23, 2008. That was before the September 15 collapse of Lehman Brothers set off a global collapse.

We probably need to see claims constantly below 400,000 a week to signal robust improvement in the employment numbers. That should come soon.

The Recession Could Already Be Over

On May 15, Linda posted the Chicago Tribune article quoting me to the effect that the end of the recession was that day. In my conversation with the reporter, I suggested he contact Professor Robert J. Gordon at Northwestern University to check my contention that an accurate advance indicator of the trough (bottom) of every recession from the 1969-1970 one through the 2001 episode was the peak in the four-week moving average of initial claims for unemployment. Prof. Gordon has been a member of the Business Cycle Dating Committee (BCDC) of the National Bureau of Economic Research since its inception in 1978 and is a keen student of business cycles.

Unbeknownst to me at the time, Dr. Gordon had already published on May 1 a paper proving this point exactly. Feel free to read the paper, “Green Shoot or Dead Twig: Can Unemployment Claims Predict the End of the American Recession?” to get all the technical details. Click here to read the full post and comment (Insights subscribers) »

“Not So Awful” Can Lead to Good News

Every Thursday (except for holidays) the Department of Labor gives us new data on the number of people who filed initial claims for unemployment insurance payments in the previous week. These numbers are quite volatile and are nearly always revised in the following week. For that reason, economists like to look at the four-week moving average (some prefer the eight-week one) to smooth out those bounces in the data.

Since the beginning of the recession on December 16, 2007, these reports have made ever-grimmer reading. However, that may be ending. Click here to read the full post and comment (Insights subscribers) »

More Good News from Consumers

On April 17 the Reuters/University of Michigan preliminary April index was reported at 61.9 (March 1966=100), up from 57.3 in March.  This was the highest since 70.3 last September.

This is one of many indicators suggesting that the US economy has stopped the “free fall” that began after the collapse of Lehman Brothers on September 15.  This would be great news if it holds.

Also, we got an upbeat report on unemployment claims on April 16.  Click here to read the full post and comment (Insights subscribers) »

Really Good News on Trade and Possibly Even Better News on Unemployment

On April 9 the BEA told us that the trade deficit for February was only $26.0 billion, down from $36.2 billion in January and the smallest shortfall in trade since November 1999. Exports rose in February for the first time since July. This means that net exports will make a positive contribution to real GDP growth for the first quarter. The BEA will give us the first estimates of that on April 29. Click here to read the full post and comment (Insights subscribers) »