Weekly unemployment claims have not increased on balance for the past 12 weeks. It's looking more and more like the economy has hit bottom. The ISM manufacturing index to be released tomorrow could be very interesting, particularly if it shows continued improvement. I see the ongoing rise in equity prices and new highs in Treasury yields as a sign that the market is beginning to accept that we've seen the low point in this recession.
Thursday, April 30, 2009
Unemployment claims still suggest a bottoming (2)
Weekly unemployment claims have not increased on balance for the past 12 weeks. It's looking more and more like the economy has hit bottom. The ISM manufacturing index to be released tomorrow could be very interesting, particularly if it shows continued improvement. I see the ongoing rise in equity prices and new highs in Treasury yields as a sign that the market is beginning to accept that we've seen the low point in this recession.
Scott,
ReplyDeleteThis is the only green shoot I really take seriously. Are we close to the bottom? Maybe. My own model suggests an NBER type decline through July (and so makes me an optimist by comparison with most forecasters). However, Dr. Robert J. Gordon thinks that there is sufficient evidence based on unemployment claims to believe that the bottom may come in June or July. I take his argument very seriously.
http://www.voxeu.org
/index.php?q=node/3524
I meant to say that he thought the bottom would come in May or June of course.
ReplyDeleteGordon has made a lot of good calls. For me, just eyeballing the chart tells me that there is a very tight and reliable relationship between the peak of claims and the business cycle trough. It also makes sense, since businesses would only slow the pace of firings once they feel they have done enough cutting and are thus prepared to start adding.
ReplyDelete