Part 6/11:
What makes the current environment unprecedented is that unemployment has increased by a full percentage point without triggering a recession label. When examining initial jobless claims—a more immediate measure of layoffs—an unusual divergence emerges: claims have not risen in tandem with unemployment.
In previous downturns, both measures moved in lockstep, signaling clear deteriorations in the labor market. Today, the divergence suggests that companies are not laying off aggressively but are instead freezing hiring or streamlining operations. This scenario allows unemployment to drift higher while the broader labor market remains relatively resilient, such as through productivity gains or corporate restructuring.