Though initial unemployment claims started to look more encouraging in late July, they're slowly starting to move in the wrong direction again. The new report from the Department of Labor showed the total inching higher for the second week in a row.
Applications for U.S. jobless benefits rose by 4,000 to a seasonally adjusted 372,000 in the week ended Aug. 18, the Labor Department said Thursday. Economists surveyed by MarketWatch had projected claims would rise to 369,000. Initial claims from two weeks ago were revised up to 368,000 from an original reading of 366,000, based on more complete data collected at the state level. The average of new claims over the past month, meanwhile, climbed by 3,750 to 368,000. The four-week average reduces seasonal volatility in the weekly data and is seen as a more accurate barometer of labor-market trends.
To reiterate the point I make every Thursday morning, it's worth remembering that week-to-week results can vary widely, and it's best not to read too much significance into any one report.
In terms of metrics, when jobless claims fall below the 400,000 threshold, it's considered evidence of an improving jobs landscape, and when the number drops below 370,000, it suggests jobs are being created rather quickly. We've only managed to dip below the 370,000 threshold six times in the last 20 weeks, though we have been below 370,000 in five of the last seven weeks.
And with that, here's the chart showing weekly, initial unemployment claims going back to the beginning of 2007. (Remember, unlike the monthly jobs chart, a lower number is good news.) For context, I've added an arrow to show the point at which President Obama's Recovery Act began spending money.
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I suspect that we will be hearing a LOT about Doug Elmendorf's report. Things do not look rosy for 2013.
From the article:
He said the economy is already being "held back" by the mere anticipation of the fiscal cliff and the uncertainty surrounding it, causing businesses to put off investment and hiring decisions.
Let me tell you... If Romney is elected, these businesses will have no second thoughts about turning on the job spigot. They want relaxed policies and taxes and are just waiting for the right regime to do the job.
Businesses hire only when the added expense would lead to more profit. A big backlog of orders in hand would cause anyone to hire more so orders can be turned into cash. Uncertainty is nonesense. It is lack of demand. The consumer has less to spend as the middle class (most of the population) earns less and saves more.
If schools could employ personnel necessary for fully functioning facilities; city, county, and state fire departments could hire personnel necessary for fully functioning fire crews; if city, county and state law enforcement could hire personnel necessary for fully functioning enforcement,
then our economy would have an infusion of demand as more family members, benefiting from being rehired (or even a chance to be initially hired) into one of the above noble civil service careers can begin to rebuild that disposable income (destroyed by the Bush Economic Policies of Ponzi) and spark that economic demand so necessary a core component of a healthy economy!
Oh, but wait - the Republican Congressional leadership has resorted to dastardly politics to make this sitting president a one-term loser!
And Presto - no legislation to help families and their communities to rebuild from the ruins of this century's first decade (one dominated by the Republican brand and its policies)!
The 2010 freshman Republican class promised Jobs, Jobs, Jobs! What we've witness from this bunch is abortion, fetal personhood, tax cuts for the rich, and a grinding halt to Senatorial advise and consent protocol!
Vote the Republican Rascals Out in 2012! -Kevo
The solution for our economic recovery is to hire more government employees? How does that work. President Obama said he would fix the economy- he did not say he would fix it only if the Republicans cooperated. So President Obama needs to live up to his promises.
Hiring more government employees during a recession is not unusual in a recession, previous republican presidents have done so. Obama is very different in this respect.
I can't find the link I am looking for.... but here are some from googling. How it works is, more people working means increased tax revenue, less benefit claimants and more people spending money and therefore stimulating the demand for products and services. We're doing austerity and massive cuts here in the UK, it's not going that well.
http://www.brookings.edu/blogs/jobs/posts/2012/08/03-jobs-greenstone-looney
http://economix.blogs.nytimes.com/2012/06/11/americas-hidden-austerity-program/
This is jst NOT good. 2013 recession .. not that we ever came out of this one
I love the way she points out the stimulus .. IT Didn't work!
Maureen you are so right. I agree, the stimulus did NOT work. Obama's economic plan has been pathetic. Hopefully we'll get a change in November. And we can get back to saying, We DID build that Mr EX President.
When the number are THIS high, we are in BIG trouble. Less of course you configure that 370,00 is a barometer for success. Yes Mr TRMS Blog author, these numbers are promising..........for a third world country ya' dingdong. Please don't ever advise anyone who really has to regulate the economy. We'd all be doomed. Your account is like putting white lace on a pigs feet. looks ok until the pig starts walking thru the mud stall. Its a BAD economy stupid.
The squeeze on the middle class and the drop in investment return for savers has caused more of us to scrimp (no movies or dining out) and save more to make up for lack of return on investments. This creates a big drop in marginal demand, especially for lower skill workers. With more pressure to save more, aggregate demand is not coming back anytime soon so neither will employment and there is nothing the FED or a politician can do to change this.
Add to this uncertainty over the future of Medicare and we see yet another reason to save more for old age.
By outsourcing jobs, we have outsourced our economy. How do you fix that?
It's more interesting if you view the data starting with 2002-2012
http://ycharts.com/indicators/initial_claims_for_unemployment_insurance/chart#series=type:indicator,id:initial_claims_for_unemployment_insurance,calc:&zoom=&startDate=8/24/2000&endDate=8/18/2012&format=real&recessions=false
Then compare it to a graph of the unemployment rate set to 2002-2012
http://www.tradingeconomics.com/united-states/unemployment-rate
Then a chart of consumer spending
http://ycharts.com/indicators/consumer_spending/chart#series=type:indicator,id:consumer_spending,calc:&zoom=&startDate=1/15/2002&endDate=8/20/2012&format=real&recessions=false
had no luck setting this one to 2002-2012 - but you should be able to set it to 2008-2012.
While sloppy, trend lines can be eyeballed with a straight edge - anyone deeply interested can down load the data sets and regress away.