The US Dept of Labor today released the figures for the jobless claims and while it still is quite a huge number, it has shown improvement from last week and the 4-week moving average has similarly declined.
In the week ending April 25, the advance figure for seasonally adjusted initial claims was 631,000, a decrease of 14,000 from the previous week’s revised figure of 645,000. The 4-week moving average was 637,250, a decrease of 10,750 from the previous week’s revised average of 648,000.
WSJ’s Real Time Economics points out the predictive power of this 4-week average.
Going back to the late 1960s, [Robert Gordon of Northwestern University] has found that the four-week average of new claims peaks about a month before the declared end of recessions with remarkable accuracy.
It was also quick to point out that as a recession different from the ones in the past, there needs to be caution as to the reliability of this ‘predictive power’. Nevertheless, any decline can only be viewed as something good; it’s only a matter of seeing the decline as a trend.