Adjusted Jobless Claims Signal End of Recession

The November employment report was released today, and the graph above of Initial Jobless Claims as a Percent of the Labor Force (1974-2009) has been updated to reflect the November labor force of 153,877,000 and the November average for initial unemployment claims (502,562 for the 4-week moving weekly average). This measure of initial jobless claims, adjusted for the size of the U.S. labor force, shows that jobless claims peaked during this recession above the levels of the last two recessions (1990-1991 and 2001), but were never anywhere close to the levels of the previous three recessions in the mid-1970s and early 1980s (see chart above).

The sharp reduction in adjusted jobless claims from the March 2009 high follows the same pattern of sharp reductions in adjusted claims at the end of the 2001 recession and at the end of each of the last five recessions.

See a very similar analysis here from Scott Grannis, who alternatively calculates jobless claims as a percent of payrolls with the exact same graphical pattern presented here using jobless claims as a percent of the labor force (slightly different denominator, but same numerator, and same story).