Jobless Claims Adjusted for the Employment Level

The Labor Department reported today that seasonally-adjusted initial jobless claims fell to a four-year low of 348,000 for the week ending 348,000, the lowest level since early March 2008.

One problem comparing weekly jobless claims over time is that they are not adjusted for the increasing size of the economy, population, or labor force over time.  For example, following the 1981-1982 recession, jobless claims fell below 350,000 for the first time in January 1984 since before the recession. But civilian employment then was only about 103 million, compared to 142 million today.  Adjusted for the employment level, 350,000 initial claims in 1984 was about 0.34% of employed workers, while today it's only about 0.25% of employment, see chart above showing initial jobless claims as a percent of civilian employment on a monthly basis back to 1968.

Bottom Line: Adjusted jobless claims in recent months are at about the exact same levels as during the last two post-recession expansions in 1992-1993 and 2002-2003, and are below comparable post-recession periods in the 1970s and 1980s.  Conditions in today's labor market are actually better than the unadjusted claims would suggest.