|Blue: Initial Unemployment Claims, scaled to Labor Force|
Purple: Insured Unemployment Rate
Green: Unemployment Rate (scaled by 1/2)
Red: Slope of Yield Curve (5 Year - Fed Funds) - right scale
I thought there were several interesting relationships here.
1) The difference between the Insured Unemployment Rate and the level of Initial Claims is a kind of proxy for duration of unemployment in the regular UI program. This relationship isn't affected by the unusual long-duration behavior we have seen this cycle. Durations among this group appear to be entering the mature phase of the recovery.
2) Unemployment is very high compared to insured unemployment. This gap will mostly close over the next 6 to 12 months, giving the real economy a boost. (speculative)
3) The flattening of the trend in unemployment claims has recently (by recently, I mean the last 25 years) been associated with a flattening yield curve (a drop in the red line). Most of this flattening usually would mostly be the result of rising short term rates. But, the current rate environment is difficult to compare to other cycles.
Rates might be rising earlier than many suspect, with the Fed adjusting interest on excess reserves upward as a secondary tool along with selling treasuries.