Thursday, December 30, 2010

Jobless milestone

The economic recovery just passed a significant threshold. Bloomberg reports
Claims for jobless benefits dropped last week to the lowest level in two years, showing the U.S. labor market is taking a turn for the better as the economy accelerates into 2011.

Applications for unemployment assistance decreased by 34,000 to 388,000 in the week ended Dec. 25, breaking the 400,000 level for the first time since July 2008, according to Labor Department figures today in Washington.
The weekly jobless figure is notoriously volatile; the week leading up to Christmas is far from typical, and the figure could subsequently be revised upward.

Nevertheless, a number below 400,000 is significant because it is generally seen as indicating an expanding labor market. The figure is also consistent with a general downward trend over the last few months.

The UI claims figures were also accompanied by other positive news. Bloomberg is also reporting
Businesses in the U.S. expanded in December at the fastest pace in two decades, adding to evidence the world’s largest economy is accelerating heading into 2011.

The Institute for Supply Management-Chicago Inc. said today its business barometer rose to 68.6 this month, exceeding the most optimistic forecast of economists surveyed by Bloomberg News and the highest level since July 1988. Figures greater than 50 signal expansion.
While these are positive developments for most of us, the good news isn't shared by all, especially the 27 percent of "patriotic" Americans (61 percent of Republicans) who hope President Obama's policies will fail.

5 comments:

James said...

Are the figures reliable?

Does this represent an actual shift or is it an artifact of chronic unemployment, hopelessness and giving up?

Dave Ribar said...

James:

The figures come from administrative records, so they're not subject to the same interpretive issues as survey questions. However, they are preliminary figures (the figures will be revised over the coming weeks). Also, the figures are seasonally adjusted (the unadjusted figure was actually 522K and was higher than the previous week's raw figure). If the adjustment calculation is off, the figure would be off.

The figure is not likely to be an artifact of chronic unemployment or discouragement. WRT to chronic unemployment, these figures are based on people who had histories of holding jobs and are in the first few weeks of their unemployment spells. Also, "giving up" would mean foregoing unemployment insurance benefits.

The figure is an indicator, albeit an incomplete one, of the flow into unemployment.

pino said...

While these are positive developments for most of us, the good news isn't shared by all,

There is significant evidence to suggest that the current administration is slowing an inevitable recovery; not "bringing back an economy from the precipice of disaster."

especially the 27 percent of "patriotic" Americans (61 percent of Republicans) who hope President Obama's policies will fail.

I think we all want America to succeed. Where we differ is in how we would define success. When Obama, and some of his admirers, define success as making the nation "more fair" or by "spreading the wealth" I think you'll find that Americans will move away from that.

In other words, if his policies are meant to generate a more "Socialistic" nation in the form of the European Socialism we see today, yes, we hope that his policies fail.

If you feel that Obama wants to continue the uniquely American dynamic of Liberty and freedom, then we should ALL want his policies to succeed rather than fail.

James said...

Thanks, Dave. Much appreciated.

James the Socialist

Dave Ribar said...

Pino:

The survey provided an opportunity to give a qualified answer; respondents could answer "some succeed, others fail."

The figures that were quoted were unqualified, unambiguous support for failure.