Weekly Unemployment Claims Fall and a Brief Look Ahead

Initial weekly unemployment claims fell more than expected to 550,000 for the week ended August 1, 2009. That is well below the 674,000 figure incurred during the week ended March 28, 2009.

To date, the 2007-present recession has seen the following with respect to initial weekly jobless claims:

• Peak initial weekly unemployment claims: 674,000
• Consecutive weeks with initial unemployment claims of 500,000 or more: 30
• Weeks with initial unemployment claims of 500,000 or more: 38
• Consecutive weeks with initial unemployment claims of 600,000 or more: 17
• Weeks with initial unemployment claims of 600,000 or more: 22

Despite the unexpectedly large decline in weekly jobless claims, initial weekly unemployment claims will likely remain at or above 500,000 for most of the rest of this year. If the past three recessions (1981-82, 1990-91, and 2001) are representative, there remains a distinct possibility that weekly unemployment claims could again approach or reach 600,000 at some point before the year is finished. Each of the past three recessions featured a brief period during which weekly unemployment claims rose before renewing a decline from their peak.



All said, looking back at the past, through the rest of the year one could see:

• 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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