May Adjusted Jobless Claims Fall to 21-Month Low

I haven't featured this pair of charts for awhile, showing: a) jobless claims vs. the labor force and b) jobless claims as a share of  the labor force, both updated through May (BLS data here and here).

The top chart shows why unadjusted jobless claims are meaningless: the size of the U.S. labor force has almost doubled over the last 42 years, from 77.57 million in 1968 to the current level of more than 154 million.  The bottom chart shows jobless claims adjusted for the size of the U.S. labor force.  Jobless claims averaged 455,250 in May, which is 0.2948% of the May labor force of 154,393,000, and represents a 21-month low (lowest since August 2008). Jobless claims as a percent of the labor force have declined in 13 out of the last 14 months, starting last April. 

This measure of initial jobless claims, adjusted for the increasing size of the U.S. labor force over time, shows that jobless claims peaked during this recession above the levels of the last two recessions (1990-1991 and 2001), but were never anywhere close to the levels of the previous three recessions in the mid-1970s and early 1980s, and about the same as the 1969-1970 recession. The sharp reduction in adjusted jobless claims from the March 2009 high of 0.415% follows the same pattern of sharp reductions at the end of each of the last six recessions.  Call it an upside-down V-shaped recovery.