by Calculated Risk on 5/07/2009 08:37:00 AM

The DOL reports on weekly unemployment insurance claims:

In the week ending May 2, the advance figure for seasonally adjusted initial claims was 601,000, a decrease of 34,000 from the previous week's revised figure of 635,000. The 4-week moving average was 623,500, a decrease of 14,750 from the previous week's revised average of 638,250.
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The advance number for seasonally adjusted insured unemployment during the week ending April 25 was 6,351,000, an increase of 56,000 from the preceding week's revised level of 6,295,000. The 4-week moving average was 6,207,250, an increase of 125,250 from the preceding week's revised average of 6,082,000.

Click on graph for larger image in new window.

The first graph shows weekly claims and continued claims since 1971.

The four-week moving average is at 623,500, off 35,250 from the peak 4 weeks ago.

Continued claims are now at 6.35 million - an all time record.

The second shows the four-week average of initial unemployment claims and recessions.

Typically the four-week average peaks near the end of a recession.

Also important - in the last two recessions, initial unemployment claims peaked just before the end of the recession, but then stayed elevated for a long period following the recession - a "jobless recovery". There is a good chance this recovery will be very sluggish too, and we will see claims elevated for some time (although below the peak).

The 35,250 decline in the four-week average from the peak appears significant, and there is a good chance that we've seen the peak for weekly unemployment insurance claims. If this is the peak, continued claims should peak soon.

The level of initial claims (over 600 thousand) is still very high, indicating significant weakness in the job market.