Continued claims for U.S. unemployment insurance — a crucial gauge of the labor market — rose last week to 2.81 million, the highest in two years, when Hurricane Katrina caused a short-lived spike in the number of jobless. The current upward trend in continuing claims has been underway for the last 18 weeks — the longest rising trend since early 2003.

Even more foreboding, the four-week moving average of continuing claims has been rising within a zone associated with the last five recessions — between 2.45 million and 2.80 million. (The last five recessions are marked out in grey columns in the graphic above). Since the most recent recession in 2001, continuing claims gradually fell during a recovery, but the four-week moving average bottomed in mid-2006 at around 2.45 million. That level is significant since it marks roughly where the four-week average was at the outset of three of the last four recessions. The top of the zone is important since the 4-week average has been in an uptrend and hit 2.80 million or more seven times since 1970, or six if one excludes the Katrina spike. Of those times, five have been during recessions.

The claims data along with the second take on fourth quarter gross domestic product growth of a mere 0.6 percent point to a conclusion that is undeniable to some. “Those who argue a recession is still improbable will have a much tougher time defending that position following today’s releases on fourth quarter GDP figures and the weekly claims for jobless benefits. Both serve to corroborate what many other economic indicators suggest: the 11th recession since World War II has very likely begun,” said Bernard Baumohl, managing director with The Economic Outlook Group.