Thursday, June 13, 2019

How I Use the Weekly Unemployment Claims report

by Calculated Risk on 6/13/2019 03:09:00 PM

Every week I post a link to the DOL report on initial unemployment claims and include a graph of initial claims over time.  I'm frequently asked if small increases in weekly claims might indicate a recession (short answer: no).

I find this report useful for two purposes.

First, this report is one of the pieces of data I use in trying to forecast the monthly employment report. This has occasionally been helpful, especially when claims rise of fall during the BLS reference week (includes the 12th of the month).

Second, when I'm on recession watch (I haven't been on recession watch since 2007), I use this high frequency report to try to estimate the timing of the recession.  In December 2007, I started posting that the recession started that month by using weekly claims and other high frequency data - but NBER didn't determine the beginning of the recession until November 28, 2008 (even though the recession started in December 2007).