Unemployment claims appear to be peaking

The dust is settling after the surge of new claims for unemployment in December and the 20% drop in early January. What we see is that the 4-week moving average of claims has been relatively steady for the past seven weeks; the high point occurred on Dec. 19th. This is not to say that claims won't go higher, but the past two months have been awful ones for layoff announcements and bad economic news in general, and they followed the abysmal market months of October and November. So it is not unreasonable to think we've seen something close to the worst of the layoffs by now. And to keep things in perspective, we need to compare the current level of claims to the size of the workforce. Using conservative assumptions, my numbers show that layoffs as a percent of the workforce in January will be only about 60% of what they were at the peak of the recessions of '75, '80 and '82. We'll have the actual numbers for that at the end of next week.