Initial Weekly Unemployment Claims Rise to 576,000

Yesterday, the Department of Labor reported that initial weekly unemployment claims rose to 576,000. That marked the second consecutive weekly increase. The figure came in above both the consensus forecast of 550,000 and the highest estimate among economists of 559,000. In addition, the four-week moving average for initial weekly unemployment claims rose 4,250 to 570,000.

Although it is still a little too soon to suggest that a fresh increase is now underway, past recessions have typically seen initial weekly unemployment claims rise anew for a time before finally falling off to levels compatible with net job creation.

Given past historic experience, not to mention the dynamics associated with the current recession, the following still appears likely:

• A period during which weekly unemployment claims rise anew, perhaps approaching or reaching 600,000 during one or two weeks.
• A persistence of initial weekly unemployment claims remaining at or above 500,000, for most of the rest of this year, though some fluctuations below 500,000 are possible.
• A low possibility that weekly unemployment claims could fall to 450,000 toward the end of the year.
• A continuing rise in the national unemployment rate from 9.4% through the rest of this year, though minor fluctuations with some small dips are also possible ahead of the peak unemployment rate.
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