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Unemployment claims show no sign of a recession




Initial claims for unemployment last week failed to rise as expected. At 401K, they have been lower this year in only 8 weeks—most of those in the Feb.-Apr. period, when the waters were muddied by faulty seasonal adjustment factors. On an unadjusted basis, last week's claims were the lowest of the year so far (329K). Clearly, there is no increase in unemployment claims under way, and no indication therefore that the economy is weakening, much less slipping into a recession.


As this next chart shows, the number of people receiving unemployment insurance continues to decline. I view this as a positive, since a) it reduces government spending, and b) it removes a disincentive for the unemployed to seek and accept job offers. Since the peak in early 2010, the number of people receiving unemployment benefits has declined by 5.4 million, or almost half. That's significant change, and it is continuing.

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