Why The Current Level Of Initial Jobless Claims Means The Unemployment Rate Will Fall Sharply

I am a fan of this chart, and have used it (or recreated it from FRED) from the Dallas Fed.  A theme here has been the disconnect between unemployment insurance claims and the unemployment rate.  The median duration of unemployment peaked in earth 2010 at 25.5 weeks, and has steadily rolled down to the present 20.7 weeks.

The mean, however, hasn't turned down until more recently, but the ratio between median and mean is looking promising relative to how it has behaved in previous recoveries.

The trend is clear.  The gap between Claims and the Unemployment Rate will close, and I wager that it will probably meet in the middle -- probably closer to 8% and 450k claims by year's end.

---------

This post previously appeared at Macrofugue >

For the latest investing news, visit Money Game. Follow us on Twitter and Facebook.

Join the conversation about this story »

See Also:

• Digging Deeper Into Friday's Jobs Report: What Is The Real Unemployment Rate?
• Why The Unemployment Rate Is About To "Fall Hard"
• INITIAL JOBLESS CLAIMS 434K

Full story at http://feedproxy.google.com/~r/businessinsider/~3/CtftNMvAcRg/why-the-current-level-of-initial-jobless-claims-means-the-unemployment-rate-will-fall-sharply-2011-5