Boom Doom Economy: USA Weekly Unemployment Claims Drop Below 400K (Charts) *4-week average dips to 405K*

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United States Department of Labor: Unemployment Insurance Weekly Claims Report

*** Updated August 11, 2011 for the week ended August 6, 2011 Claims ***

Trend The current weekly unemployment claims of 395,000 (preliminary) is the first time below 400,000 after 17 consecutive weeks above. Recently the preliminary estimates have been revised upwards the subsequent week, so the revision next week will establish if this is actual. The short-term trend (4-week moving average) continues decreasing for the 6th consecutive week. The intermediate-term trend (26-week moving average) is now increasing slightly, after reaching a Post-Great Recession low of 412,692 last week. The long-term trend (52-week moving average) continues downwards, reaching a new Post-Great Recession low each week. The 2011 average weekly claims of 414,219 year-to-date are lower than 2010 average weekly claims of 457,481.

Cycle History USA weekly unemployment claims reached a Great Recession cyclical peak of 651,000 for the week ended March 28, 2009. A Post-Great Recession cyclical low of 371,000 was set for the week ended February 26, 2011.

USA Weekly Unemployment Insurance Claims: 4-Week Moving Average (Chart) The chart below shows the 4-week moving average through the latest week reported. The 4-week moving average is considered a better, smoother measure of short-term trend. The Post-Great Recession cyclical low has been 388,500 for the week ended March 12, 2011. The recent peak has been 440,250 for the week ended May 14, 2011.

USA Weekly Unemployment Insurance Claims (Chart) The chart below shows the total weekly unemployment claims through the latest week reported. The Post-Recession cyclical low has been 371,000 for the week ended February 26, 2011. The recent peak has been 478,000 for the week ended April 30, 2011.

Commentary The current weekly unemployment claims of 395,000 (preliminary) continues the overall downward trend. Continuing this trend below 400,000 is necessary to impact the unemployment rate. The USA unemployment rate is probably not significantly decreasing and probably continuing at or near the present 9.1% unless the weekly unemployment claims can remain below 400,000 for an extended period. The short-term trend (4-week moving average) continuing downwards for 6 consecutive weeks is encouraging.

History Weekly unemployment claims first reached 500,000 in the Great Recession cycle at 508,000 for the week ended November 15, 2008. Weekly claims continued above 500,000 until the week ended November 21, 2009 at 477,000. Weekly claims have been below 500,000 since the week ended November 21, 2009 with only one exception (504,000 for the week ended August 14, 2010). Claims over 500,000 clearly indicate GDP growth is slowing, if not stalling or contracting, while claims less than 400,000 indicate at least a modest economic expansion is underway.

Official Statement by the U.S. Department of Labor (Seasonally Adjusted Data) In the week ending August 6, the advance figure for seasonally adjusted initial claims was 395,000, a decrease of 7,000 from the previous week's revised figure of 402,000. The 4-week moving average was 405,000, a decrease of 3,250 from the previous week's revised average of 408,250. The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending July 30, a 0.1 percentage point decrease from the prior week's unrevised rate of 3.0 percent. The advance number for seasonally adjusted insured unemployment during the week ending July 30 was 3,688,000, a decrease of 60,000 from the preceding week's revised level of 3,748,000. The 4-week moving average was 3,718,750, a decrease of 15,250 from the preceding week's revised average of 3,734,000.