Ever since How the World Works learned that a peak in weekly jobless benefit claims has historically correlated quite neatly with the end of a recession, I've been obsessively poring over new data from the Department of Labor, announced every Thursday morning.
Today's disappointing numbers -- initial claims up 15,000 to a total of 627,000, and continuing claims up 29,000 to 6,738,000 -- do not yet contradict the proposition that new jobless claims peaked a few months ago. However, the emerging pattern is not what we would expect to see if the numbers were destined to follow the historically determined trajectory.
Previously, once the peak was reached, the rate at which the total number of new jobless claims fell was speedy. Once you labor all the way to the top of the mountain, then you get to ski down. But that's not happening this time around. The decline from the peak, as measured by the four-week-moving-average, has been exceedingly gentle. This week, the four-week-moving average rose -- up 500. That's a small bump up, but what we'd like to be seeing right now, as a sign that the labor market is poised for a real recovery, is a sharp drop, and not a meandering plateau.
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