Unemployment 10.2% – What does this mean..

Well it looks like unemployment has reached 10.2% on 11/6/09, the highest in 26 years. There is one number that has been decreasing, initial jobless claims filed. What does this mean? Well it looks like companies are not laying off as many people, so new people are not filling claims at the unemployment insurance office. I’ve made a graph below from the Department of Labor statistics:

Initial Jobless Claims

Initial Jobless Claims

Usually initial jobless claims have been a leading indicator of a turnaround in an economy and a recession. While this does not take the sting out of the current situation that we’re in (I might be on the chopping block for a layoff myself), it can hopefully bring some hope to us that things are slowly turning around. Remember that the unemployment rate overall is a lagging factor, meaning that it responds after the fact in a recovery. First, companies will have to start seeing a recovery in the market, followed by hiring, followed by lower unemployment.

Let’s all hope for the best and stop listening to the doom and gloom media reporters.