Intial unemployment claims jumps

It’s Thursday, so time again for my favorite economic indicator… initial unemployment claims.

In the week ending Sept. 20, the advance figure for seasonally adjusted initial claims was 493,000, an increase of 32,000 from the previous week’s revised figure of 461,000. It is estimated that the effects of Hurricane Gustav in Louisiana and the effects of Hurricane Ike in Texas added approximately 50,000 claims to the total. The 4-week moving average was 462,500, an increase of 16,000 from the previous week’s revised average of 446,500.

To get a sense of how bad this looks versus recessions of the last 50 years, look at this graph. At 493,000 claims last week, we’re headed on a straight trajectory into the territory of the horrible economy of the early eighties. We’re over the precipice into a recession with no signs visible of a bottom.