Talking about turnover, the second graph is from JOLTS that I post each month (Job Openings and Labor Turnover Survey). This seems to provide a hint - sometimes. As the economy improves, it is easier to find a new job - so some people who might have filed for unemployment don't because of new employment.Įach month, when I post an "employment preview", I look at weekly claims (especially for the BLS reference week). That was pretty close, but a rough number.Ĥ) Even though there is a general relationship, this doesn't suggest a coming surge in employment. This is probably because of improved hiring.ģ) Following the recession, a number of analysts pointed out that when claims dropped below 400 thousand per week, the economy would probably start adding jobs. If there were 300,000 initial weekly claims per week, that would mean 15 million layoffs per year! However, some of these layoffs are regular - as an example when workers are furloughed (common in some industries) they are eligible for unemployment benefits.Ģ) Unemployment benefits have been trending down over time. Note: For smoothing, this graph use a 3-month centered average of net payroll employment, and the 4-week average of initial unemployment claims.ġ) Even with a "low level" of initial weekly claims, there are a large number of claims per week (and per year). Note that unemployment claims are graphed inverted. There is definitely a general relationship as shown in the first graph.
And if claims are so low, does that mean a surge in employment gains?
A reader asked about the relationship between initial unemployment claims and monthly payroll employment.
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