Initial Unemployment Claims for July 9, 2009

On July 9, 2009 the Department of Labor released the most recent data on initial unemployment claims for the week ended July 4, 2009 in "Unemployment Insurance Weekly Claims Report." The new report paints a more optimistic picture. Seasonally adjusted initial claims was 565,000, down 52,000 from a revised estimate of initial claims of 617,000 for the week ended June 27, 2009. The 4 week moving average decreased 10,000 to 606,000. The average is down 52,750 from its peak, signaling a possible peak for this business cycle. Even though the average has declined, initial claims are still very high.[1]

Using National Bureau of Economic Research estimates on the beginning and ending dates of recessions, I have  included a graph that compares the recessions that began in March 2001, July 1990, and July 1981 with the current recession which began in December 2007. I have not attempted to adjust the data for changes in the size of labor market. The plots are measured over 94 weeks, beginning eight weeks before the recessions began. The horizontal axes begins in October 2007, the date the current recession began, and the data for the other recessions is superimposed on those dates. The graph gives some insight into why economists, politicians and others have expressed so much concern about the current recession. The current recession seems to have the depth of the 1981 recession but the 4 week moving average seems to be falling more slowly than it has in past episodes.

[1] Robert J. Gordon did research looking at the relationship between the 4 week moving average of initial unemployment claims and found that recessions often bottom out shortly after the 4-week moving average of initial unemployment claims peaks. The average may have peaked at 658,750 for the week ended April 4, 2009..