The scent of recession may be in the air, but it’s not yet creating a stink in jobless claims.
New filings for jobless benefits fell last week to 317,000, the lowest in a month, the Labor Department reported. As you can see from the chart below, the trend doesn’t look particularly ominous. In fact, it looks quite middling by the standard of recent history.
The future may bring darker trends, but for the moment the status quo prevails. In fact, it’s not too hard to find an economist who’ll tell you that initial jobless claims running consistently below ~330,000 a week suggests a bubbling U.S. economy. And while we’re looking at trends, let’s not forget that initial claims have now fallen for three weeks running.
“It’s still consistent with a moderate expansion of the labor base.” Richard DeKaser, chief economist for National City Corp. in Cleveland, told Reuters today.
But let’s not get too excited. Jobless claims numbers not necessarily dispense timely warnings far in advance. Going back to the last time Wall Street and the economy ran into trouble, it’s worth remembering that initial jobless claims stayed calm long after the stock market bubble burst in March 2000. It wasn’t until December of that year and into the first quarter of 2001 that jobless claims reflected the dangers that had been brewing for some time.