Thursday, April 16, 2009
The behavior of weekly unemployment claims seems to be signaling the end of the current recession. Claims were relatively flat at high levels for the past 6-7 weeks, and this week they dropped unexpectedly by a fairly large amount (610K instead of the expected 660K). This chart (its first appearance here) shows the rate of change, year over year, of the 4-week moving average of claims. That growth rate peaked 5 weeks ago, and has since dropped meaningfully. I would note that the reduction in claims was foreshadowed in my post last weekend. Obviously we'll have to see more follow-through to be sure, but this could well mark an inflection point in the economy, with the rate of decline now slowing instead of picking up speed. Similar behavior can be seen at the end of the last two recessions. The list of "green shoots" is getting longer.
Posted by Scott Grannis at 8:29 AM