Thursday, July 1, 2010

Weekly claims going nowhere

Weekly unemployment claims ticked up a bit in the recent week, but are essentially flat so far this year. I don't see anything here that would support an imminent double-dip recession, but neither do I see any impressive strength. I think these numbers are consistent with an economy that is recovering at a moderate rate.


Brian Shelley said...


Is it possible that this "double-dip" is a different kind of recession? Not a financial crisis or a bubble burst, but a slow uneven decline caused by interventionist policies and uncertainty about future policy?

They keep paying people to not work through UI. They subsidize certain industries erratically. They pass huge byzantine "reforms" that no one can decipher and details left to bureaucratic preference.

Could this time be different?

Bill said...


What do you expect from tomorrow's BLS report given yesterday's poor showing from the ADP report? It would be nice if these numbers would spur Congress to lower corporate taxes but I guess that's just a pipe dream.

Scott Grannis said...

Brian: To begin with, I just can't find any signs that the economy is on the verge of actually declining. Everything I see points to an ongoing recovery. Bad policies and uncertainty are certainly important factors, but I don't see them creating another recession or even a modest decline; I see them as headwinds that keep the economy growing at an uncomfortably slow pace (3-4%) that will result in the unemployment remaining relatively high for at least the next year. So this time will be different, since we won't get a robust recovery.

BTW, the number of people receiving unemployment insurance has actually declined by 2.8 million since the peak in early January (from 11.65 million to 8.82 million). This is a pretty impressive decline of 25%.

Scott Grannis said...

Bill: I'm no expert in predicting the employment data. But I suspect that whatever the number is, it may prove to be good for the market, given how pessimistic everyone has become. Also it will be very important to focus on the household survey, which so far has shown a very impressive gain in employment this year. The household survey typically does a better job of picking up new employment in the early stages of a recovery than the establishment survey.