initial claims with the s&p 2012 to current


The Labor Department’s initial and continuing claims data were released today, covering claims through the week ending March 23rd. Overall, initial unemployment insurance claims came in at 357K, an increase of 16K over the revised figure from the prior week. Additionally, the revised figure from the prior week was moved upward by 7K from 334K.  The seasonally adjusted initial claims figures are now about 7 percent above where they stood for the week ending March 9th.  The week of March 9th represents the lowest initial jobless claims figure since the onset on the economic recovery in 2009.

What do the initial claims figures mean?  Well, most economists appear to shrug off this week’s figures as simply statistical noise in the overall trend movement towards greater labor market improvement.  Contrarily, individuals watching the initial claims figures closely may say the two weeks of uptick may represent something more.

The top chart depicts the movement of initial claims and the S&P 500 (INDEXSP:.INX) index from January 1, 212 to the most recent figures.  The left axis and the smaller line represent the initial claims figures.  The right axis and the larger line represent the S&P 500 index.  As is represented, the two generally move in an inverse relationship.  The following chart containing a longer time series from 2003 to current depicts the same relationship.

Do the top chart and the chart below depict a peak and a trough or simply statistical noise?  Well, that’s a question beyond the scope of this reporting, although professionals besides the “statistical noise economists” appear to be somewhat concerned.

 initial claims with the s&p 2012 to current

The concern among some professionals that we’re seeing the beginnings of a peak and trough story that is likely to burst by the end of 2013 appears to be the minority, at least as measured by market performance.

With this in mind, how much lower can the initial claims figures go (i.e. the trend story instead of the trough story)?  Well, perhaps about 50 K, unless, of course, you think claims can go much lower than 300 K and stay there for some time.

Overall, initial unemployment claims came in about 16 K higher today over the upwardly revised 341 K of the prior week.  The 23 K increase in initial claims represents a 7 percent increase from the March 9th low.  The debate among initial unemployment claims watchers is whether the recent initial claims figures represent simply statistical noise or whether the beginnings of a trough is appearing.