Thursday, June 23, 2016
U.S. Jobless Claims Near 43-Year Low
The number of Americans filing for unemployment benefits fell last week to near a 43-year low
You really almost have to be delusional to think we are in a recession now if the number of people applying for jobless benefits is at a 43-year low.
Initial claims for state unemployment benefits declined 18,000 to a seasonally adjusted 259,000 for the week ended June 18, according to the Labor Department.
The drop was the largest since February and left claims not too far from a 43-year low touched in March.
Claims have now been below 300,000, a threshold associated with a strong job market, for 68 straight weeks, the longest streak since 1973.
Austrian school business cycle theory teaches that the down phase of the business cycle occurs as capital and labor readjust to a capital-consumption structure without a central bank manipulation of the money supply. If you don't see climbing jobless claims, there is no readjustment going on, ergo no recession.
Take a look at the chart above that shows jobless claims and recessions (the shaded areas), jobless claims begin to climb before the start of a recession and continue throughout most of the recession.
In other words, a period when jobless claims are near a 43-year low does not suggest that we are in a recession and that "the Federal Reserve will soon have to reverse its December rate hike and push rates negative,"
at 1:39:00 PM