US Jobs Data Getting Worse

Just a week after saying that US unemployment was at a 14-year high of 6.5%, the US has posted more poor jobs data today.

US initial jobless claims surprisingly jumped to a 7-year high of 516K during the week ended November 8. This is the number of Americans filing new claims for state unemployment insurance.

In addition continuing jobless claims for the week ended November 1 rocketed to the highest reading since December 1982.

The figures suggest that the US labour markets are continuing to deteriorate at a rapid rate, and unemployment rate could be climbing much higher.

Looking at a chart of continuing claims versus the unemployment rate going back to 1970, it's clear that the figures used to be significantly more correlated. However, changes to the methodology used by the Bureau of Labor Statistics (BLS) to calculate the unemployment rate since 1994 have weakened the link.

See here where the orange line is % unemployed. It is also interesting how unemployment peaks and troughs seem to cycle at roughly 10-year intervals.