Gavekal Capital: US Initial Unemployment Claims Make 14-Year Low

Thursday, October 16, 2014

US Initial Unemployment Claims Make 14-Year Low

Initial claims for unemployment insurance fell to just 264K for the week of October 10th. This is the lowest level since April 14th, 2000. The non-seasonally adjusted series is now down 23% year-over-year. This is a positive sign that the US economy isn't on the brink of a recession. The non-seasonally adjusted series tends to rise year-over-year as the economy falls into a recession (blue bars in the second chart). Unemployment claims as a percent of payroll employment fell to a 8-year low. Surprisingly, considering this positive and improving employment back drop, St Louis Federal Reserve Bank President James Bullard told Bloomberg this morning that the Fed should consider delaying the end of QE.

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Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
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