FT.COM — The number of US workers claiming unemployment benefits fell to the lowest level since January last week, as the pace of job cuts eased and car companies shifted the timing of their layoffs. New jobless claims fell by 47,000 to 522,000 in the week ending July 11, according to the Department of Labor. The less volatile four-week average of new claims also declined last week, falling by 22,500 to 584,500 (see chart above).
MP: The 22,500 drop in the four-week average of new jobless claims was almost the largest weekly decline on record – there have only been two previous larger declines in history (back to 1987 according to Dept. of Labor records): a 41,500 decrease in 1992, and a 26,250 decline in January of this year. The chart above also shows a strong similarity between the 80,000 decline in jobless claims (four-week average) from the peak in 2001 and the 74,2500 decline from the early April 2009 peak.
Could this be “The Spike” that Dennis Gartman has been looking for? From today’s “The Gartman Letter”:
To this we add the notion that last week’s jobless claims number might well have been “The Spike” downward we’ve been commenting upon and awaiting for the past several months. As we’ve written about here countless times over the past several years, “claims” turn down almost spot on the turn upward in economic activity. Its history is almost as uncanny as is that of the Ratio of Coincident to Lagging Indicators.
Last week’s “claims” were somewhat suspect given that they were compiled during the week of the July 4th holiday, so we shall look at today’s claim’s with rather heightened anticipation. If they remain weak and are not seasonally adjusted away in some fashion we shall be much impressed. So too should everyone else. If claims are still below 600,000, then the “spike-iness” of last week’s number will obtain, and when aligned with the recent turn upward in the Ratio of Coincident to Lagging Indicators shall be reasonable proof-positive that the recession’s end is hard upon us.