Labor Market Back to Normal?

The Department Of Labor released its unemployment data last Thursday with the following status:

In the week ending August 14, the advance figure for seasonally adjusted initial claims was 348,000, a decrease of
29,000 from the previous week’s revised level. This is the lowest level for initial claims since March 14, 2020 when it
was 256,000.

This means that new applicants for unemployment are at their lowest levels since March 2020. A certain amount of unemployment claims are healthy in an expanding economy – businesses pivot or downsize in order to temporarily invest elsewhere. I’m not sure what the “healthy number” is for new claims, but it is an encouraging sign that displacement has slowed.

Here is the chart showing the full effect of unemployment claims through the pandemic:

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