Here is another indicator of the weak job market, brought to us by the friendly people at the U.S. Department of labor:
In the week ending May 9, the advance figure for seasonally adjusted initial claims was 637,000, an increase of 32,000 from the previous week’s revised figure of 605,000. The 4-week moving average was 630,500, an increase of 6,000 from the previous week’s revised average of 624,500.
The advance number for seasonally adjusted insured unemployment during the week ending May 2 was 6,560,000, an increase of 202,000 from the preceding week’s revised level of 6,358,000. The 4-week moving average was 6,337,250, an increase of 128,750 from the preceding week’s revised average of 6,208,500.
A few things to note regarding this data:
- The initial claims number, while high, is roughly 30K less than the peak number (for this recession) that was established a few weeks ago
- The continued claims of 6.56M is a new record
- If GM goes into bankruptcy, it is reasonable to expect that initial claims will remain high even if other areas of the job market improve slightly
- If initial claims remain high, there will be a cascade effect to other areas of the economy – namely retail.
Bottom line: The “green shoots” of hope seen by the Federal Reserve are long since gone. While the economy may be in a bottoming process, we are far from being in a good position.
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