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Claims show continued, slow improvement

Weekly claims for unemployment are important because they are very timely and can thus be early indicators of a change in the economy's dynamics. With the exception of some noisy seasonal adjustments earlier this year—when claims plunged in February only to surge in April—the trend in claims has been clearly down since the beginning of last year.

The chart above shows unadjusted claims and their 52-week moving average. Here it is easy to see how the trend in claims has been trending gradually down all year, and all indications point to that continuing.

The number of people receiving unemployment insurance also continues to trend lower, as people exhaust their eligibility and/or find a job. The total number of people "on the dole" has plunged from about 11 million early last year to about 6 million currently. This creates frustration for some, but it also increases the incentive to find and accept a job for many others.

In short, there is no sign in the claims data of any deterioration in the economy's employment fundamentals. The employment fundamentals continue to slowly improve.

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