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One hiccup in claims doesn't mean anything

The market today is distressed over the unexpected rise in unemployment claims, among other things. But nothing ever moves in a straight line, as this chart should attest. What's happening today has happened before, without serious consequences. Consider the first half of 1992, when claims were averaging about 420K per week, and then briefly jumped to almost 450K. That didn't stop the economy from growing at an annualized 4.3% throughout the first half of 1992. In fact, if you adjust claims for the size of the workforce (which is 21% larger today than it was then), today's level of claims is about 5% lower than than the average level of claims in the first half of 1992. This is a tempest in a teapot, as they used to say.

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