The Recession Claim

One of our competitors claims that we are in a recession. Another claims that we will soon be in a recession. The most widely anticipated recession of all times is turning into the longest widely anticipated recession of all times. One day, the diehard hard-landers will be right. Was today the day? We're sure that their heartbeats quickened on today's jobless claims report. Consider the following:

(1) Initial unemployment claims hit their highest level since August during the May 4 week. They rose 22,000 to 231,000 (sa [seasonally adjusted]), one of its first meaningful increases after a string of low readings. Recall, jobless claims are often a good leading indicator for where the economy is heading—managers don't reduce their payrolls when they're looking to expand their business. This comes on the heels of April's nonfarm payrolls print, which showed the smallest employment gain since October. Furthermore, the unemployment rate ticked higher last month to 3.9% (chart).