Though January offered some wild seasonal swings on initial unemployment claims, the new report from the Department of Labor shows conditions improving quite a bit in February.
The number of Americans who applied last week for new jobless benefits fell sharply, though it's unclear whether part of the drop stemmed from the huge snowstorm that battered the Northeast. Applications for initial unemployment benefits sank 27,000 to a seasonally adjusted 341,000 in the week ended Feb. 9, the Labor Department said Thursday. Economists surveyed by MarketWatch expected a much smaller drop to 360,000 from a revised 368,000 in the prior week. Claims are now just slightly above a five-year low.
It's worth noting that results from Illinois and Connecticut were incomplete due to heavy snow storms, leading the Labor Department to use estimates.
That said, the seasonally adjusted 341,000 claims is the second-best total we've seen in the U.S. in the last five years.
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 been below the 370,000 threshold eight of the last 10 weeks.
Above you'll find 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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Happy days are here again.
Happy Valentines Day!
They have been here...for the last four years
But Jobless claims are not the measure. The measure is the ratio of jobs to support the same population in 2008. That ratio went down dramatically in 2008, and it is not recovering. (Graph of the ratio from the federal reserve here).
Worse, it is not clear where these new jobs are going to come from. As pointed out in this Atlantic article. They are not going to come from manufacturing. So it is not clear how Obama's visit to the manufacturing plant in North Carolina is a sign of the kind of big new initiative that is going to get us out of this funk.
As I was pointing out yesterday, the Bureau of Labor statistics forecasts just a .7% annual growth in jobs over the next 10 years. But the Census bureaus is forecasting a .76% growth in population. So take another look at that federal reserve graph. That line is going to go down, not up.
Tell me what in the President's jobs proposals are going to turn that around. He put together a series of small bore proposals that poll really well. If the idea is to beat Congress over the head with popular programs with the intent of sweeping them out of office so real things actually could get done, fine.
But as for real things that will help us now, I don't see them.
@John Messerly -- Go back and take another look at the American Jobs Act which the House has been sitting on for what, a year or so? Economists concluded it would likely reduce unemployment by 1-2 percentage points and create in the neighborhood of 1M+ jobs. That's a significant plan, but it will never see the light of day in the House - it doesn't fit in with the Tea Party's political bloodlust to 'hurt some people.' And not for nothing - in my book, a lowered unemployment number of 341,000 claims vs. 750,000 claims when the President took office is still major progress.
I was surprised to see in this Robert Reich Talk at Google many of the ideas presented on Jobs in Obama's state of the Union. Perhaps the former Labor Secretary is a member of the intellectual shadow cabinet of Obama? It has the seeming pastiche of Minimum wages, German apprenticeship education, and early preschool education policies, but he is explaining how they fit together.
I guess the hardest thought for me to digest is his idea that human consumption is infinite. The idea is that there will always be demand for new innovative products because demand will always metastasize. If this is so, there will always be new horizons. The first problem I see is that of sufficiency. After a while, enough is enough. Solutions are good enough and the need for innovation in that area ceases We come up with the idea of a ceramic bowl, and after 20,000 years, we are still using them.
While I can see that is true in science and technical product development, the problem is that these are not labor intensive activities.
The key problem is that the labor intensive activities are the low skill low pay jobs. The high pay labor intensive jobs are being destroyed by automation and outsourcing as Reich points out, hollowing out the middle class. In the 90s, where the jobs were available was a U shaped curve- jobs available at the low and high end, but negative growth in the center where the bulk of everyday average paying Ward Cleaver jobs were. This chart shows the evolution of that curve, and what it means is ominous. If you didn't see it yesterday, the chart with citations is here. The paper is it taken from: "Polarization of Job Opportunities in the U.S" is here.
@June. I support that infrastructure program (details here), but let's be honest. 12 million jobs were lost, and temporary injections of government spending is not going to replace them. It is true that this injection is good to deal with the cyclical problem that Krugman points at. The consumer economy is 70% of the total economy, and it is starved of purchasing power. As Reich points out in the Google video I link to above, Government is the spender of last resort and can be the source of the water that primes the pump and gets it flowing again. But listen to the gloomy footnote to that metaphor. Reich states that there is a problem that there is not that much water down in that well anymore. The problem is to grow it. Network effects, centralization and economies of scale tend to reward in a winner take all fashion so that wealth is concentrated rapidly. If we decline to interfere in this market dynamic, then one way to mitigate it is redistribution. But Reich points out how politically toxic that idea is in American culture.
So really, the problem goes way beyond simple steps like the American Jobs Act, or the modest steps Obama outlined in his speech- desirable though those steps are. It's more of his general "too little too late" approach to both the crisis of Jobs and Climate change.
And it is a recipe for disaster.
John, I respect Reich, but if he's stating that consumer purchasing power is starved, the January 2013 consumer spending report found that consumer spending is at its highest level in eight years - granted, yes, there are 'headwinds', but I believe that's driven more by the constant uncertainty of fiscal cliff/debt default/sequester/gov't shutdown, than by 'water in the well.' To your point of 'too little, too late,' am I the only one that recalls that the President immediately introduced and implemented the American Re-investment and Recovery Act upon taking office in 2009? - which by 2010 had turned a hopeless jobs picture into one that within a year had cut the Bush recession job losses by a third? -- and that he implemented the rescue of the auto industry, which also certainly wasn't just a 'small bore' step. Even without any GOP cooperation and with their massive opposition, some 4-6m of those 12m jobs that were lost have been replaced. Put a passed American Jobs Act into the picture, and we're looking at a real-world result of at least making up over two-thirds of those jobs that were lost. I believe Obama deserves much more credit for the actual results he's produced.
As far as climate change goes, that's another 'book' to write, but suffice it to say, I also believe he should get more credit than he does on the topic.
Read what that report says. It doesn't say that 3.6 million lost jobs have been restored. It says that there are 3.6 million jobs that would not have been there had it not been for the recovery act. That is an entirely different statement.
If you don't believe me- take a look at this chart from Chris Hayes' show a few weeks ago: (link) Look at the red line. That's where we are. We are no where close to recovering 4 to 6 million jobs as you seem to believe.
As you can see, we have clawed back maybe 1.5 million, but even if we assume we start growing jobs at the healthiest rate of the 2000's prior to the Meltdown (purple line), we won't have those 12 million back by 2020.
2020! And that is not anywhere near where we have to be to restore the 63% employment to population ratio.
So really, you are living in a fantasy world if you think we have made the progress you think we have, or that the proposed policies are anywhere near aggressive enough.
If you think otherwise, I have shown you where I am getting the numbers I have quoted. You need to see if you can find any authoritative reference that supports what you seem to think is true. Because I think if you look, you will find that there aren't any.
Slowly but surely, we're getting there. We should be down to about 5% unemployment by the time the mid-terms get here. 5% has been about as close as we can get to full employment in the modern era.
Alva- you are defining full employment in terms of the people who have not given up hope of finding a job. Our economy in 2007 had a 63% employment rate. Within the months following the meltdown, it dropped 4.5%, and the trajectory of that number is down, not up.
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I like happy talk too, but Benen's post is just that. We need to be fact based about the Jobs situation, and the trajectory is bad, not good.
John, you're talking about what the BLS calls the "discouraged worker" rate. That's been a growing problem since 2001. However, the reality is that we are recovering. This is the natural flow of market cycles. We will continue to gain employment for years to come. Next year will be better than this year, and so on and so forth. Anyone who thinks things are worse than they were a year ago simply isn't aware of the facts.
You are not paying attention. Census.gov projects the population rate will go up by .76% annually over the next 10 years. Bls.gov projects the jobs growth rate at .7% annual.
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That is a downward population to employment to population trend, not upward, so Alva, it is you who is not being fact based. We used to be at 63% employed, we are now 58.5%, and we are going more negative, not positive. If I am mistaken, show me why.
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