Initial Claims | Barataria - The work of Erik Hare

Of all the various measures of the economy we have at our disposal, one of the most consistent and real-time is the Unemployment Initial Claims, which comes out weekly. It’s nothing more than a measure of how many people filed for unemployment insurance in the previous week, so it’s a solid number that doesn’t come from a survey or other statistical measure.

It still has its problems, however. It’s noisy, bouncing up and down a bit each week – a problem taken care of by looking at a 4-week moving average. Initial Claims numbers also don’t tell us a thing about hiring, but rather how many lost their jobs.

It hasn’t been useful for at least two years as attention turned away from job loss to job creation that would absorb the surplus workers looking for employment. But it’s worth checking in with this handy number one more time because it has hit an important milestone – and may be as low as it will ever go.

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While waiting for new information, it’s always good to go over the old stuff and see how we’ve done so far. Barataria used to use the weekly unemployment initial claims as an instant guide to how the Depression has been running, but stopped a year ago. The rationale at the time was that we were close to equilibrium at about 360k jobs lost every week. There wasn’t much reason to expect a change.

How did that assumption fare? And was this really proof, along with job growth leading GDP growth, that we are in an unusual economic event? Let’s go back over some old ground and see how the old predictions went. Some of this went well and some not so well.

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