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,"
-RW
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I would agree with this sentiment. I speak with many people in other industries and they can't find any labor, plus the labor they do get have poor skill sets. Seven years ago we had guys with master degrees working the factory floor.
ReplyDeleteI'm still curious as the whether or not this accounts for the huge number of "discouraged workers". If a person has exhausted their unemployment benefits and slipped into the "discouraged worker" category, they would not be able to file an initial claim. Therefore, they would not be included in this statistic. That alone changes the value of this chart. These seem more like manipulated statistics rather than an accurate view of the economy.
ReplyDeleteThis data set is not consistent with others like Challenger layoffs or the ISM Services employment index. It will resolve sooner than later. There is more evidence of an emerging bust than a continuing boom at this point. You are not seeing the inflections all around you. Any predictions for Durable Goods tomorrow?
ReplyDeleteWell... Durable Goods today now down YOY 17 straight months. This has never happened outside a recession. Eyes still wide shut?
ReplyDelete