Thursday, September 30, 2010

USA Weekly Unemployment Claims at 3 Week Low (Charts) *Total Claims 453,000*


United States Department of Labor: Unemployment Insurance Weekly Claims Report

USA Weekly Unemployment Claims at 3 Week Low

Official Statement The Department of Labor reported, "In the week ending Sept. 25, the advance figure for seasonally adjusted initial claims was 453,000, a decrease of 16,000 from the previous week's revised figure of 469,000. The 4-week moving average was 458,000, a decrease of 6,250 from the previous week's revised average of 464,250. The advance seasonally adjusted insured unemployment rate was 3.5 percent for the week ending Sept. 18, a decrease of 0.1 percentage point from the prior week's revised rate of 3.6 percent. The advance number for seasonally adjusted insured unemployment during the week ending Sept. 18 was 4,457,000, a decrease of 83,000 from the preceding week's revised level of 4,540,000. The 4-week moving average was 4,526,750, a decrease of 5,500 from the preceding week's revised average of 4,532,250."

Cycle History Weekly unemployment claims for the week ended September 25, 2010 are down -198,000 and -30.4% from the Great Recession peak of 651,000 for the week ended March 28, 2009. The current unemployment claims are up +26,000 and +6.1% from the subsequent low of 427,000 for the week ended July 10, 2010. Therefore, current claims are closer to the cycle bottom than the peak.

Trend Weekly unemployment claims continue below the recent 2010 peak of 504,000 for the week ending August 14 (6 weeks ago). The current claims of 453,000 are below the 4-week moving average of 458,000, and also below the 13-week, 26-week, and 52-week moving averages of 467,308, 464,808, and 476,635, respectively. Weekly unemployment claims are within a recent range with a peak of 504,000 and trough of 427,000 and the 4-week moving average is trending downwards.

Chart (4-Week Moving Average) The chart below shows the 4-week moving average for the last 52 weeks (1 year) of weekly total unemployment claims, from the week ended October 3, 2009 through the latest week reported, September 25, 2010. The 4-week moving average is considered a better, smoother metric. The recent trend has been downwards since the recent peak of 488,000 for the week ended August 21, 2010.  Longer-term, the 4-week moving average dropped significantly to reach a first low of 462,500 for the week ended January 9, 2010. After an increase, another low was set of 448,000 for the week ended March 27, 2010. This has been the Great Recession cyclical low to-date.

Chart (Weekly Unemployment Claims) The chart below shows the total weekly unemployment claims for the last 52 weeks (1 year) from the week ended October 3, 2009 through the latest week reported, September 25, 2010. A general decline in claims is indicated, with a recent peak of 504,000 reached for the week ended August 14, 2010 and a Great Recession low of 427,000 reached for the week ended July 10, 2010 which has been the cyclical low to-date.

Commentary The 4-week moving average is now trending downwards, which is encouraging. Weekly claims, after reaching a peak of 504,000 (which was the first time greater than 500,000 since the week ended November 14, 2009), are continuing within a range with a peak of 504,000 and trough of 427,000. Obviously claims at the 500,000 level is a benchmark, as is the 400,000 level. Weekly claims have not been below 400,000 for over 2 years, since the week ended July 12, 2008 claims of 385,000. Weekly claims first dropped below 500,000 in this Great Recession Cycle for the week ended November 21, 2009 at 477,000. So recent weekly claims have been in this range since November 21, 2009 with only one exception. Claims over 500,000 clearly indicate GDP growth is slowing, if not stalling, while claims less than 400,000 indicate a decent economic recovery is underway. Hence the uncertainty over the pace of the USA economic recovery.

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