Continued unemployment claims continue their steep decline, even as they reach record lows. I don't have a lot of detail to add this month. A further decline in the unemployment rate again this month seems likely, especially considering that last month barely missed 5.7%.
My employment forecasts from early in the year seem to be coming true, and yet forward interest rates have plummeted. Did anyone manage to forecast unemployment at the end of 2014 heading to the mid-5's while the 10 year treasury sits at 3.0%?
Meanwhile, in December 2013, the FOMC projected 4Q 2014 unemployment at 6.3%-6.6%, continuing their pattern of being 1 year behind the actual change in unemployment (the 4Q 2015 projection was 5.8%-6.1%), and the median FOMC Fed Funds Rate projection for the end of 2015 was 0.75%. By the September 2014 meeting, they still forecasted 5.9%-6.0% for 4Q 2014 and 5.4%-5.6% for 2015, continuing their pattern of being 1 year behind. But, now their Fed Funds Rate projection for the end of 2015 was 1.375%. Fed Funds projections from the coming meeting will be interesting to see.
As for the unemployment rate in November, the question seems like it will again be, does it fall a little or a lot? Eventually, insured unemployment will level out, and then we will have to wait and see if the excess relative unemployment persists. But, as long as insured unemployment continues to decline so strongly, there is no historical precedent for unemployment not to follow.