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Justin Wolfers

A Fuzzy First Economic Indicator on the Shutdown

If you're like me, you're on the edge of your seat waiting to see how the economy responds to the current budget battles.

We're not going to see the September nonfarm payrolls report until this whole government-shutdown mess is resolved. I'm following the data on initial unemployment claims, instead. They're a timely indicator -- the latestdataare for last week. And they're quite informative, as they're based on a complete count of new applications for unemployment insurance, rather than a noisy survey.

The latest survey suggests good news, with initial claims for the week ending Sept. 28 of 308,000. Thus, over the past four weeks, initial claims have averaged 305,000, a distinct move down from an average of 332,000 over the previous four weeks. Moreover, initial claims are now firmly back to their pre-recession levels, and indeed, their lowest level since May 2007. Unemployment remains elevated not because people are losing their jobs at high rates, but because the unemployed are still finding it difficult to find work.