Calculated Risk puts out a nice chart of Initial Recession Claims every month.
The text anecdotes in blue are mine, as are the boxes.
I like the chart, not for what it says, but for what is doesn’t say.
Will we have a recession warning or not?
My guess is no.
Mike “Mish” Shedlock
I still see U-5 and U-6 higher. Unemployment numbers have been jobbed over the last few decades to make it look like it is lower than it actually is. I still think the effects of the great recession understate U-2.
There is also the issue of labor supply. Like immigration or not, immigration increased labor supply over the last 15 years and now that supply is dwindling due to Trump’s policies. US population growth is stagnating – not like the rest of the world but not growing as it has in past generations and baby boomers leaving the workforce every day. These factors are a major factor in low unemployment and more critically that businesses can not find employees. Overtime that will slow economic growth.
Trump could have run on the merits of the economy and improvements to economic measures. Instead he felt the need to ask countries to dig up dirt on a potential political opponent as far back as 2017. The fact that he could even lose 2020 election shouldn’t be a question. If you look at other sitting presidents with similar numbers on unemployment they all won in landslides. Trump has only himself to blame if he loses because his message is always about the opponent. The guy literally finds ways to fail himself at every turn.
A year from now, no one will pay any attention to this and he’s put a hatchet in Biden’s bid. Not that Biden was going to be the nominee anyway.
That’s why Trump was so dumb for doing it. Instead of behaving like a frontrunner with a great economy, he looks guilty and acting like he is going to lose. It is no wonder he has self destructed multiple times in his life and is now a politician. Thr fact that he doesn’t mind foreign influences in elections, intelligence and security makes him look all the more guilty if he isnt.
I see 2 things. The present drop is insanely long in the tooth compared to previous cycles and things can rapidly spiral out of control.
I have no idea if and when we’ll have our next recession from looking at the graph.
See my comment, but I think due to dwindling labor supply this is not going to be a major factor in determining if there is a downturn.
I think Mish’s point was that unemployment is not a reliable leading indicator of recession. That’s all.
UNEMPLOYMENT claims are near the lowest level they have been since 1971, and somehow that is a bad thing? We want more people to file for unemployment benefits?
Even assuming there was a recent uptick in claims, the scale on the graph tells us that whatever uptick is not meaningful.
The graph tells me that employers are having trouble filling positions, and are accepting more marginal candidates — something I have observed and commented about at my company.
Nothing in this graph says recession. I assume something on it is mislabeled, or else the blog post title is wrong
An uptick in unemployment claims from a historic low is not the same as prior upticks. Also, labor force is much bigger and chart isn’t adjusted for this.
Just another chicken little story for the doom and gloom crowd.
Enjoy your life and have a nice weekend.
“My guess is no.”
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Agree. The fat was cut during last recession. Recovery / expansion past 10 years weak and uneven never allowing fat to build. When (not if) the job losses show up it will be a signal conditions are poor NOW.
Mish, bear in mind the expansion in the labour force over the last 20-30 years. 200k initial claims today is a relatively small proportion of the overall number in comparison to the past.
I think the striking GM workers can file for unemployment, which it seems to me is not really unemployment. I expect that is just mixed into the whole unemployment filings number.
MMT has worked flawlessly for the American Empire, for thousands of yrs, since the dawn of time. I don’t understand why anyone questions it. It works that is an incontrovertible fact. The point is we must use it to benefit us the people not The Empire.
Nothing short of MMT will save (Trump)the economy haha!Obama racked up close to 10 tril in 8 years,Trump in 4 will rack up7-8….and yet we’ll see fewer people working than since Bonanza was at the top of the ratings.
By the way, that graph is spectacular.
Mirror, mirror on the wall
Punch me in the face and kick me in the ball
Will we have a recession, or can we have it all?
“The first shots are being fired in a new trans-Atlantic front of the U.S. global trade fight. The Trump administration plans to roll out tariffs on $7.5 billion of imports from the European Union on Oct. 18… after the World Trade Organization said the U.S. is entitled to impose levies in response to the bloc’s subsidies to Airbus SE” [Wall Street Journal]. “The decision marks the WTO’s biggest arbitration award and raises the potential for retaliatory actions by the trade partners that go beyond rival plane makers Airbus and Boeing Co. The new levies will include commercial aircraft as well as agricultural and industrial goods. That’s likely to lead to bigger volleys between the trading partners.”