In a trend that will drive both the Fed and the administration crazy if it lasts too much longer, weekly unemployment claims are moving in the wrong direction.

Please consider the Unemployment Insurance Weekly Claims Report.

In the week ending Jan. 23, the advance figure for seasonally adjusted initial claims was 470,000, a decrease of 8,000 from the previous week’s revised figure of 478,000. The 4-week moving average was 456,250, an increase of 9,500 from the previous week’s revised average of 446,750.

Chart of 4-week Moving Average

Weekly claims have to drop to about 400,000 to be at a point that is normally consistent with the economy adding jobs. I question whether normally applies.

Compared to March 2009 weekly claims have been drifting lower. However, hiring does not seem to be picking up. It may take a substantially lower number of weekly claims this go around before we see any drop in the unemployment rate.

From the report, there are 5,350,477 workers on emergency benefits, and another 4,669,250 workers on regular benefits. Thus 10 million people are out of a job who want to work, and that does not count the number of people who have exhausted regular and emergency benefits.

Recovery? Where?

Mike “Mish” Shedlock
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