We’re continuing to look at economic data which is easily accessible and analyze in MS Excel. I looked at data for Ohio unemployment insurance weekly claims. There are two types of weekly claims data – initial and continuing. They mean pretty much what the say. An initial claim is when someone files for unemployment insurance who is not already in the system. Someone who has been drawing unemployment insurance and draws another week’s benefit is a continuing claim. This data came from the U.S. Dept of Labor’s website and I looked only at continuing claims from 2007 to present.
The marks I made on the chart may look familiar to folks who trade stocks and dabble in technical analysis. There are two things going on here. The red, sloped line is a trend line – down trend, obviously. I have noted “lower highs” which are a sign of a strong downtrend.
The orange line is a support line which simply approximates the point at which the moves down bounce back up into short term uptrends.
So, what’s the analysis, or, what can we look for that would be good news as more data is added to this chart? First, we want this particular beast to continue going down. Successive lower highs within the primary downtrend are good news for unemployment numbers. Second, we want to see the support line broken, meaning the data breaks down through the support line – and hopefully stays there.