Mixed unemployment numbers, as initial claims fall, continuing claims rise
Economists surveyed by Bloomberg News had expected jobless claims to total 575,000 this week. The four-week moving average for initial jobless claims decreased 8,750 to 563,000. Economists view the four-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, and other idiosyncratic events.
Economists also monitor the continuing claims stat because it provides a snapshot of how long it's going to take the typical person to find comparable employment once he/she has sustained a job loss. In general, continuing claims above 3 million reflect a slack labor market, and point to extended 6-9 month (or longer) job searches.
The highest insured unemployment rates in the week ending Aug. 29, the latest week for which data is available, were in: Puerto Rico, 6.8 percent; Oregon, 5.7 percent; Nevada 5.5, percent, Michigan, 5.2 percent; Connecticut, 5.1 percent; New Jersey, 5.1 percent; California, 5.0 percent; Wisconsin, 5.0 percent; North Carolina, 4.8 percent; and Rhode Island, 4.8 percent.
Economic Analysis: For the typical person, the recovery, at least initially, will feel like a recession, largely due to the high level of employment, and the dearth of job growth. Moreover, given likely, mild GDP growth during the recovery's initial stage, jobless claims probably will not return to normal levels near 300,000 for at least a year, and most likely longer.
Still, given given that employment tends to recover later in the recovery cycle, investors should stay focused on recent positive economic signals: apparent housing market and manufacturing sector stabilization, re-liquefied credit markets, and fiscal stimulus deployment all suggest that the nation's recession has ended, and that a recovery is underway.