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U.S. UNEMPLOYMENT RATE

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Two-decade long horizontal support at 280K on the U.S. weekly jobless claims chart suggest we might be at a “positive extreme” for the U.S. job market. 1989, 2000 and 2006 have proved to be the lowest levels for the weekly jobless claims. Reversals from 280K area resulted in a weak U.S. job market in the following years. Unemployment rate moved higher following the years 1989, 2000 and 2006. In 2014, U.S. weekly jobless claims reached as low as 266K. Latest data stand at 316K. Every long-term trend has an end. Historical levels on the long-term charts are warning us of a possible reversal. It is important to keep an eye on these two long-term charts in the following months.

US WEEKLY JOBLESS CLAIMS

US UNEMPLOYMENT RATE

U.S. UNEMPLOYMENT

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U.S. ADP January payroll change smallest since August at 175,000. U.S. employment increased by 175K private sector jobs in January. Data updated on a monthly basis.

Thursday: U.S. weekly jobless claims data. Data updated on a weekly basis.

These two data series become more important as FED starts tapering program. U.S. weekly jobless claims and ADP Employment (total nonfarm private employment) reached strong support levels; in other words overstretched levels from historical perspective. Any data point going forward could be worse than expected. Historically medium/long-term reversals took place around these levels. By looking at these long-term charts on the economic time series, I believe the FED will not be aggressive in their tapering program in the following months. Any spike on the U.S. weekly jobless claims or worse than expected numbers on the ADP employment could weaken the case for further tapering.

ADP EMPLOYMENT

US JOBLESS CLAIMS