New Claims: Took care of most of that this morning. However, lets look at the recent recessions. One of the things I notice is how, so far, the shape of this one is more reminiscent of the two 80s recessions than of the 1990 or 2001 recessions.

image

We have a long sharp increase as the recession begins and then a fairly sharp top.  The two recent recession were more of a gentle upward drift. There is still something of a sharp peak but it flattens out early. Its clearly too soon to tell how sharp this peak will be but the latest data release gives us some hope.

This also causes me to question the purely structural hypothesis for the jobless recovery. Could we be seeing a difference in effective monetary policy. In the 1980s the Fed was tightening into the recession. In 1990 and 2001 the Fed was loosening into the recession. 

image

The Fed was loosening into this recession as well but that was overwhelmed by the escalating credit crisis. I’m thinking out loud here but could very strong quantitative easing bring new claims down quickly here as well?

About these ads