U.S. jobless claims foreshadow an ugly unemployment number

| 5 February 2009 15:56

U.S. initial jobless claims soared to yet another 26-year high, registering 626,000 for the week ending January 31st.  The continuing claims number was equally dreadful, hitting an all-time high of 4.79 million.

jobless-claims-2009-02-05

If you recall, last week I mentioned that the seasonally-adjusted numbers were not conveying the full measure of weakness in the employment market.  This continues to be the case as the unadjusted numbers are a full 326,000 greater this year than last year, whereas the reported numbers have only risen by 243,000.  I expect these year-on-year comparisons to normalize going forward with the seasonally-adjusted numbers playing ‘catch-up.’  That means initial jobless claims are sure to rise further still.

One other tidbit from this week’s numbers: the employment numbers are worse now than during the 1980-1982 recessions using my favorite metric of year-on-year comparisons. Only 1973-1975 is worse. This is another telling indicator of the severity of the implosion in the U.S. jobs picture.

jobless-claims-change-2009-02-05

Sources
Unemployment Insurance Weekly Claims Report – U.S. Department of Labor
U.S. Economy: Jobless Claims Soar, Labor Productivity Rises – Bloomberg.com

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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