Ian Shepherdson Claims Quotations

No doubt bears will highlight the rise in continuing claims, up another 29,000, but we are unmoved: A rising ratio of continuing to initial claims signals accelerating productivity growth, not a shaky recovery, ... Labor market conditions are improving -- but we still expect a soft payroll report Friday.

For the second straight week, jobless claims have substantially undershot the consensus, ... Analysts apparently do not want to accept that the flow of extra job losses caused by the events of Sept. 11 is slowing sharply, but that is exactly what the data indicate.

Katrina and Rita effects still linger, though they are fading, ... Claims will likely rise next week as the full effects of Wilma hit, but the downward trend is very clear.

While claims at 350,000 or so would not be a disaster, they would be consistent with (monthly) payrolls trending at only about 125,000 -- not enough to push the unemployment rate any lower.

We had hoped the flow of people filing for extended benefits would slow this week, pushing claims back towards their underlying trend -- about 350,000, but it didn't happen,

The pattern in claims in recent months is strikingly similar to 1990 -- a long slow climb and then a sudden acceleration as layoffs accelerated,

We believed the underlying level of claims peaked in the spring. This suggests that they may now genuinely have begun to decline.

Unfortunately, at current levels, and coupled with the extraordinarily low level of labor demand, the claims numbers are still consistent with flat or falling payrolls and a rising unemployment rate. There's no real relief in sight here yet.

Even though most people displaced by the storm are still away from their homes, Labor Department officials have been helping people make claims from their temporary accommodations.

At 296,000, claims have slipped back to a five-week low, ... This is simply too low a level to be consistent with a major change in the labor market.

The trend in claims has risen this year, in tandem with the clear drop in business confidence in the period before the war with Iraq. If claims are sustained at this level they will signal an acceleration in the rate of net job losses recorded in the payroll numbers.

This is a welcome surprise; the trend in claims in recent weeks has been strongly upwards.

This dip in claims is unlikely to prove significant. The trend, measured by the four-week moving average, is still rising after its turn of-the-year decline.

There may be some adverse seasonal effects at work in the claims numbers, thanks to the late Easter, but the underlying trend is surely unfavorable, ... A reversal requires a quick and steep recovery in business confidence.

It now appears that the trend in jobless claims is stabilizing at about 400,000 per week, ... This is well above the trend level at this time last year, but it is no higher than in the spring. This means that layoffs are continuing at a rapid pace, but they are not accelerating.

The message from these claims numbers is strong and clear. The labor market is extremely tight.

Claims have now been essentially static for three months, so even if the latest declines turn out to be unsustainable, the data will still show that the trend is no longer rising rapidly, and may not be rising at all, ... It looks like the worst of the worst is now over in the labor market.

Claims fell because the initial wave of job losses after Sept. 11th is fading.

Claims are a good leading indicator of the unemployment rate; these data suggest the rate will be nudging 4% by mid-summer.

If claims remain at their current level, we could expect the unemployment rate to be down to 4 percent or so by mid-summer.

If claims remain anywhere near this week's level, they will send a very strong signal that the labor market is tightening.

For now, claims signal strong payrolls and a lower unemployment rate.

The true underlying trend in claims is downwards, but it is slow.