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Thursday, April 12, 2007

Weekly Unemployment Claims

by Calculated Risk on 4/12/2007 01:00:00 PM

From the Department of Labor:

In the week ending April 7, the advance figure for seasonally adjusted initial claims was 342,000, an increase of 19,000 from the previous week's revised figure of 323,000. The 4-week moving average was 323,250, an increase of 7,000 from the previous week's revised average of 316,250.
Weekly Unemployment ClaimsClick on graph for larger image.

Here is a different way of looking at the weekly claims data. This graph lines up the last two recessions (1990 and 2001) at week zero, and looks at the 4-week moving average for 2 years before the recession and 3 quarters after the recession starts (gray area is recession).

For the current period, I assumed a recession starts in July 2007 - just to compare to the previous periods. The rise in weekly claims due to hurricane Katrina is very evident.

Although there are historical periods when weekly claims didn't provide any advance warning of a recession, in general claims do start creeping up before the onset of an economic recession. So far weekly claims are not suggesting an imminent (with the next month or two) recession.