Posted by Marcelo Perez

The number of people filing for first time unemployment benefits rose in the latest week, continuing the sharp upward trend that began during the first part of this new year. According to the US Department of Labor, for the week ending March 7th, initial jobless claims gained 9,000 to stand at 654,000. That’s slightly off the highest levels seen since October 1982. The reading is worse than forecast, as expectations were for a slight increase to 645,000 new claims. For some perspective: initial claims running consistently atop the 350,000 mark would signal some weakening in the labor market. Claims above 400,000 are seen by many as a signal of recession.

Having witnessed extremely volatile measurements in the past few weeks, it is wise to consider the four-week moving average of initial claims, which smooths out one-time factors such as bad weather or holidays. The four-week average continued its trek upwards, rising by 6,750 to a multi-decade high of 650,000. It’s at the highest level since October 1982.

The underlying trend in claims is still rising, and could reach a peak of 750,000 - Ian Shepherdson, chief U.S. economist with High Frequency Economics

It is pretty obvious now that businesses are laying more employees off, and at a faster pace, and that the unemployed are having a tougher time looking for a replacement job. A year ago, initial claims were at 347,000.

But, although claims are at levels not seen since the severe 1982 recession, the context today is much different. For one, the workforce is around 50% larger than it was in 1982, so a frightening 600,000+ number is not nearly as bad as it was then.

Continuing claims are once again on the rise, after dropping for the first time in seven weeks:

In the week ended Feb. 28 the number of people receiving unemployment checks rose 193,000 to a record 5.32 million. The four-week average of these ongoing claims increased 124,250 to 5.14 million, also a record-high level.  - MarketWatch

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