New Claims for Unemployment Insurance: What Does This Tell Us About the Chances of a Double Dip?

Last Updated Aug 11, 2011 12:56 PM EDT

Just a quick note. Data on new claims for unemployment insurance released today show a continuation of the gradual downward trend it has exhibited in recent months:
In the week ending August 6, the advance figure for seasonally adjusted initial claims was 395,000, a decrease of 7,000 from the previous week's revised figure of 402,000. The 4-week moving average was 405,000, a decrease of 3,250 from the previous week's revised average of 408,250.
Via Calculate Risk, here's a graph of the evolution of the 4-week moving average over time:

This indicates that we are having trouble gaining the traction needed to grow robustly -- the growth rate of output and employment is far too slow -- but it is not what you'd expect to see if a double dip was just around the corner. Don't get me wrong, we can't rule out a double dip by any means and the slow growth we are experiencing calls for policymakers to provide help in any case, but this does tip the scales a little bit in the other direction.