Yellen’s Myth (Part 1)

Notwithstanding Fed Chair Yellen’s certainty about her “myths”, recession indicators are continuing to accumulate as the current U.S. economic expansion continues to clearly trend into its twilight period.

While Yellen is apparently not able to “see anything in the underlying strength of the economy that would lead me to be concerned” about recession, let’s take a look at just a few points of interest that she clearly must have missed.

First, there has been notable protracted weakness in industrial production which is now showing a year-over-year decline of over 1%, a VERY strong indicator of fundamental weakness that is virtually always associated either directly with current or looming recession.


Additionally, both Industrial Production and Capacity Utilization have now show simultaneous notable year-over-year declines, an event that is literally associated with every recession since both data sets have been tracked.


Next, jobless claims appear to have hit the low for this expansion which, as we know from all other past expansions, generally does not stay at this level for very long.

In fact, population adjusted Continued Jobless Claims (continued claims as a percentage of non-institutional population) is at the lowest level since 1969, a strong indicator that insurance claims, and by proxy the general employment situation, has reached its best levels of the expansion.

Weekly Unemployment Claims: Initial and Continued February 12 2015

Today’s jobless claims report showed a notable increase to initial unemployment claims and a decrease to insured unemployment claims as seasonally adjusted initial claims jumped above the 300K level.

Seasonally adjusted “initial” unemployment claims jumped 25,000 to 304,000 claims while seasonally adjusted “insured” claims declined by 51,000 to 2.354 million resulting in an “insured” unemployment rate of 1.8%.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims September 20 2012

Today’s jobless claims report indicated that both initial and continued unemployment claims declined slightly as seasonally adjusted initial claims remained just below the closely watched 400K level.

Seasonally adjusted “initial” unemployment claims declined by 3,000 to 382,000 claims from a revised 385,000 claims for the prior week while seasonally adjusted “continued” claims declined by 32,000 resulting in an “insured” unemployment rate of 2.6%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 2.16 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 2.93 million people that are currently counted as receiving traditional continued unemployment benefits, there are 5.09 million people on state and federal unemployment rolls.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims May 31 2012

Today’s jobless claims report showed a notable increase to initial unemployment claims and a decline to continued unemployment claims while seasonally adjusted initial claims approached the closely watched 400K level.

Seasonally adjusted “initial” declined to 383,000 claims from last week’s revised 373,000 claims while seasonally adjusted “continued” claims declined by 36,000 resulting in an “insured” unemployment rate of 2.6%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 2.93 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.12 million people that are currently counted as receiving traditional continued unemployment benefits, there are 6.05 million people on state and federal unemployment rolls.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims April 19 2012

Today’s jobless claims report showed a declined to initial unemployment claims and an increased to continued claims while seasonally adjusted initial claims continued to trend well below the closely watched 400K level.

Seasonally adjusted “initial” declined to 386,000 claims from last week’s revised 388,000 claims while seasonally adjusted “continued” claims increased by 26,000 resulting in an “insured” unemployment rate of 2.6%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 3.20 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.47 million people that are currently counted as receiving traditional continued unemployment benefits, there are 6.67 million people on state and federal unemployment rolls.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims January 26 2012

Today’s jobless claims report showed notable increases to both initial and continued unemployment claims as seasonally adjusted remained below the closely watched 400K level.

Seasonally adjusted “initial” unemployment increased 21,000 to 377,000 claims from last week’s revised 356,000 claims while seasonally adjusted “continued” claims increased by 88,000 resulting in an “insured” unemployment rate of 2.8%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 3.41 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 4.11 million people that are currently counted as receiving traditional continued unemployment benefits, there are 7.53 million people on state and federal unemployment rolls.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims January 05 2011

Today’s jobless claims report showed a decline to both initial and continued unemployment claims as seasonally adjusted initial claims continued to trend lower below the so closely watched 400K level.

Seasonally adjusted “initial” unemployment declined 15,000 to 372,000 claims from last week’s revised 387,000 claims while seasonally adjusted “continued” claims declined by 22,000 resulting in an “insured” unemployment rate of 2.8%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 3.50 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.61 million people that are currently counted as receiving traditional continued unemployment benefits, there are 7.11 million people on state and federal unemployment rolls.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims December 08 2011

Today’s jobless claims report showed notable declines to both initial and continued unemployment claims as a slight rising trend was firmly called into question for initial claims.

Seasonally adjusted “initial” unemployment declined 23,000 to 381,000 claims from last week’s revised 404,000 claims while seasonally adjusted “continued” claims declined by 174,000 resulting in an “insured” unemployment rate of 2.8%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 3.30 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.16 million people that are currently counted as receiving traditional continued unemployment benefits, there are 6.47 million people on state and federal unemployment rolls.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims November 03 2011

Today’s jobless claims report showed an decline to both initial and continued unemployment claims as a slight rising trend was called into question for initial claims.

Seasonally adjusted “initial” unemployment declined 9,000 to 397,000 claims from last week’s revised 406,000 claims while seasonally adjusted “continued” claims declined by 15,000 resulting in an “insured” unemployment rate of 2.9%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 3.48 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.19 million people that are currently counted as receiving traditional continued unemployment benefits, there are 6.68 million people on state and federal unemployment rolls.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims October 27 2011

Today’s jobless claims report showed an decline to both initial and continued unemployment claims as a slight rising trend was called into question for initial claims.

Seasonally adjusted “initial” unemployment declined 2,000 to 402,000 claims from last week’s revised 404,000 claims while seasonally adjusted “continued” claims declined by 96,000 resulting in an “insured” unemployment rate of 2.9%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 3.44 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.13 million people that are currently counted as receiving traditional continued unemployment benefits, there are 6.58 million people on state and federal unemployment rolls.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims October 13 2011

Today’s jobless claims report showed an decline to both initial and continued unemployment claims as a slight rising trend was called into question for initial claims.

Seasonally adjusted “initial” unemployment declined 1,000 to 404,000 claims from last week’s revised 405,000 claims while seasonally adjusted “continued” claims declined by 55,000 resulting in an “insured” unemployment rate of 2.9%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 3.55 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.16 million people that are currently counted as receiving traditional continued unemployment benefits, there are 6.71 million people on state and federal unemployment rolls.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims September 15 2011

Today’s jobless claims report showed an increase to initial unemployment claims and a decline to continued unemployment claims as a slight rising trend began to materialize for initial claims.

Seasonally adjusted “initial” unemployment increased 11,000 to 428,000 claims from last week’s revised 417,000 claims while seasonally adjusted “continued” claims declined by 12,000 resulting in an “insured” unemployment rate of 3.0%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 3.60 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.43 million people that are currently counted as receiving traditional continued unemployment benefits, there are 7.04 million people on state and federal unemployment rolls.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims May 05 2011

Today’s jobless claims report showed a stark jump to initial unemployment claims and an increase to continued unemployment claims as a notable rising trend continued to materialize for initial claims.

Seasonally adjusted “initial” unemployment increased by 43,000 to 474,000 claims from last week’s revised 431,000 claims while seasonally adjusted “continued” claims increased by 74,000 resulting in an “insured” unemployment rate of 3.0%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 4.12 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.78 million people that are currently counted as receiving traditional continued unemployment benefits, there are 7.90 million people on state and federal unemployment rolls.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims November 10 2010

Today’s jobless claims report showed a notable decrease to both initial and continued unemployment claims as a continued flattening trend shaped up for initial claims and traditional continued claims continued to trend down.

Seasonally adjusted “initial” unemployment declined by 24,000 to 435,000 claims from last week’s revised 459,000 claims while “continued” claims declined by 86,000 resulting in an “insured” unemployment rate of 3.4%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 4.72 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.75 million people that are currently counted as receiving traditional continued unemployment benefits, there are 8.48 million people on state and federal unemployment rolls.

The following chart shows the recent trend in initial non-seasonally adjusted initial jobless claims with the year-over-year percent change acting as a rough equivalent of a seasonally adjustment.

Historically, unemployment claims both “initial” and “continued” (ongoing claims) are a good leading indicator of the unemployment rate and inevitably the overall state of the economy.

The following chart shows “population adjusted” continued claims (ratio of unemployment claims to the non-institutional population) and the unemployment rate since 1967.

Adjusting for the general increase in population tames the continued claims spike down a bit.

The following chart (click for larger version) shows “initial” and “continued” claims, averaged monthly, overlaid with U.S. recessions since 1967.

Also, acceleration and deceleration of unemployment claims has generally preceded comparable movements to the unemployment rate by 3 – 8 months (click for larger version).

Extended Unemployment: Initial, Continued and Extended Unemployment Claims August 12 2010

Today’s jobless claims report showed another increase in initial claims and a drop in continued claims with a subtle flattening continuing to shape up for both series while total continued claims including federal extended benefits appears to have exploded as a result of the recent extension of unemployment insurance adding more than a million new long term unemployed on the extended benefit roll.

Seasonally adjusted “initial” unemployment increased by 2,000 to 484,000 claims from last week’s revised 482,000 claims while “continued” claims declined by 118,000 resulting in an “insured” unemployment rate of 3.5%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 5.28 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 4.57 million people that are currently counted as receiving traditional continued unemployment benefits, there are 9.85 million people on state and federal unemployment rolls.

The following chart shows the recent trend in initial non-seasonally adjusted initial jobless claims with the year-over-year percent change acting as a rough equivalent of a seasonally adjustment.

Historically, unemployment claims both “initial” and “continued” (ongoing claims) are a good leading indicator of the unemployment rate and inevitably the overall state of the economy.

The following chart shows “population adjusted” continued claims (ratio of unemployment claims to the non-institutional population) and the unemployment rate since 1967.

Adjusting for the general increase in population tames the continued claims spike down a bit.

The following chart (click for larger version) shows “initial” and “continued” claims, averaged monthly, overlaid with U.S. recessions since 1967.

Also, acceleration and deceleration of unemployment claims has generally preceded comparable movements to the unemployment rate by 3 – 8 months (click for larger version).