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(CEP News) - Once again, economists will be watching U.S. initial jobless claims data for signs of stabilization in the labour market.
Initial claims for unemployment benefits in the week ending April 25 are expected to remain flat at 640k following a 37k rise last week. Continuing claims are expected to rise further to 6.2 million in the week ending April 18, up from 6.137 million in the previous week. "The peak in claims in the March 28 week at 674K appears to be holding, so this is the best chance for an end to the recession for a few months now," said economists from the Bank of Tokyo-Mitsubishi UFJ. They noted it has been six months now since the start of the credit crunch in September, meaning many firms have already completed their first round of layoffs. "Based on initial claims the recession end would be April or May 2009, 16 or 17 months after it began in December 2007." Economists say initial jobless claims data over the next several weeks will be closely watched, since seasonal factors such as Easter, Passover and school spring breaks have caused increased volatility in the indicator recently. "The next few weeks will be especially important for gauging broader labor market trends," economists from Nomura Securities said. Last week, economists suggested a continued stabilization of the four-week average of initial claims would signal an end to the recession. Abiel Reinhart of JPMorgan Chase Bank said that while the fall in the four-week moving average has so far been relatively small, it is "quite unusual" for it to drop as much as it has during a recession. Last week, the four-week moving average for initial claims eased to 646,750 from 651,000 in the week prior. Initial and continuing U.S. jobless claims will be released by the Department of Labor at 8:30 a.m. EDT. By Stephen Huebl,
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