Thursday, October 31, 2013

Initial claims vs oil prices

Oil prices inverted and unemployment claims
Do high oil prices cause unemployment?  Yes it did,  during and shortly after the crash.  But conservation and fracking solved the immediate oil shortage problem.  We do not now suffer a bubble in oil prices, we have adapted. However, look at the recent report of initial claims out today, and recent oil prices. Oil prices down and claims up, a sign that producers reducing the demand for both oil and employees, the coefficient has reversed.  The second major constraint on the economy is prominent,  a negative force now drives claims up and oil down simultaneously.  Likely cause? DC multipliers still less than one.

No comments: