Concern about the employment situation have resulted in considerable churning – both in the financial markets and in the minds of investors – about the various labor market data. The recent nonfarm payrolls report raised more questions than it answered and the weekly jobless claims numbers often suffer from a low signal to noise ratio that makes it dangerous to get too excited about one week of data.
In an effort to put the nonfarm payrolls data into some historical perspective, last week I assembled Chart of the Week: Nonfarm Payrolls and Backsliding to highlight the nonlinear aspect of much of this monthly data. Rather than wait until the end of this week, I thought it might be helpful to do something similar for the initial and continuing jobless claims data.
The chart below captures the jobless claims data going back to 1967. Since these are absolute numbers, it is important to note that the current universe of workers covered by unemployment insurance is almost three times as large as it was in 1967. Still, the trends have a great deal of informational value. Note, for instance, that the data are on two axes and the initial jobless claims (solid red line) seems to have settled into a holding pattern that is near the highs from the 1990-91 and 2001-03 recessionary periods.
For more on related subjects, readers are encouraged to check out:
- Chart of the Week: Nonfarm Payrolls and Backsliding
- Nonfarm Payrolls Before and After Recessions
- Chart of the Week: Updated Nonfarm Payrolls and Unemployment Rate
- Chart of the Week: Nonfarm Payrolls, Unemployment Rates and Time
- Chart of the Week: Putting Nonfarm Payrolls in Context
- Chart of the Week: Continuing Jobless Claims