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Not much progress on the unemployment claims front in the past few weeks. Still, as the chart suggests, it can take a year or so following the end of a recession to have a meaningful decline in unemployment claims. Nothing here to change the view that we are in the early stages of a recovery.
4 comments:
Scott,
I saw a report based on an interview with one of the Fed members who estimated that the real unemployment rate was closer to 17% if you count discouraged workers and those who have lost significant work hours. It sure feels as though there is less to do, even if you have a job. Is this any different from past recessions like the '81'82 recession where the reported unemployment rate was cost to 11%?
It's called U-6, it includes those 'underemployed' in addition to those unemployed, and it's reported in each employment report. Last reading was 16.3% and the high in the last recession actually occured after the recession ended; U-6 hit 10.4% in Sep-03.
Bloomberg only has data back to '94 for U-6. Try the BLS website for a longer history.
Why do you insist on posting a dumb chart? The economic indicator is the percentage decline not the numerical decline in initial claims. See Gordon here and update the charts.
As an NBER BCDC member, Gordon might be on to some real time thing, but real personal income less transfers and nonfarm payroll employment are not congruent with the recovery thing.
Furthermore, the CFNAI and the Aruoba-Diebold-Scotti Business Conditions Index are consistent that there is no recovery thing yet.
I've posted several versions, including percentage changes, of this chart in previous posts. Like Gordon, I think the turn in the economy happened around May/June. The business conditions chart you reference suggests we may still be a month or two away from the turn. In any event I'm not really concerned with the date of the turn. I'm focused on changes on the margin, and everywhere I look they seem to be favorable.
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