by Calculated Risk on 6/05/2006 04:25:00 PM

From Bernanke's remarks today: Comments on the Outlook for the U.S. Economy and Monetary Policy

"Gains in payroll employment in recent months have been smaller than their average of the past couple of years, and initial claims for unemployment insurance have edged up. These developments are consistent with the softening in the pace of overall economic activity that seems to be under way."(emphasis added)

Click on graph for larger image.

The vertical white line is the start of the previous recession. Initial claims spiked after 9/11 and Hurricane Katrina, but in general the four week average of initial claims changes slowly.

As Bernanke noted, initial claims have been rising. A couple of weeks ago, I suggested this might be an indicator of slowing job market.

This is something to watch before the next Fed meeting.