Economic Update

National unemployment claims point to turning point in job losses. What does that mean for our local economy?

One indicator of local economic conditions is the national economy. Regional economies develop unique relationships with the national economy depending on the industries that exist within the region. For example, regional economies that are heavily invested in manufacturing may not be as resilient as service-based economies dependent on health care and education.

Several weeks ago, I suggested that the economy was about to enter a trough in unemployment, or in other words, job losses would become “less bad”. We are now beginning to observe this both nationally and locally. This week, there were two significant national releases providing further evidence of a turn, and we highlight this information here today.

The private ADP Employment report comes out two days before the national employment report released by the Bureau of Labor Statistics. As you can see from the graph below, jobs losses have decelerated.

Source:  Barrons.com

Weekly unemployment claims were released on Thursday, and showed a healthy decline for the week ending May 2. The 4-week moving average is now on an obvious downward trend. Continuing claims increased however, and this suggests that any trough in job losses will be associated with a wide U shape. In other words, it will take some time to recover some of these job losses. On the plus side, Indiana reported 1,595 fewer job claims, citing fewer job losses in manufacturing. Kentucky reported additional job claims of 3,681, citing layoffs in automobile, warehousing, and manufacturing industries.

Source:  Barrons.com

The Super Bowl of economic data, the monthly Bureau of Labor Statistics employment report, will be released on Friday morning, May 8th, at 8:30 am. As you read this note, the report will have already been released, and it will likely show that national job losses have moderated from the previous months. Going forward, the US auto industry will be the wild card for employment.

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This information is provided by

Uric Dufrene. 

Uric Dufrene, Ph.D. holds the Sanders Chair in Business in the School of Business at Indiana University Southeast.  He conducts research on local and regional economic trends, and teaches corporate finance at the undergraduate and graduate levels.   He previously served as dean of the School of Business.