The roller-coaster ride on initial unemployment claims continues, with the new report from the Department of Labor showing unexpectedly good news, after last week's unexpectedly discouraging news.
The number of people who applied for regular state unemployment-insurance benefits dropped 22,000 to 344,000 in the week ended Feb. 23, the U.S. Department of Labor said Thursday. Even as large federal spending cuts are set to kick in soon through sequestration, the data signal continuing improvement in the labor market, though claims levels could jump going forward as workers are cut. Economists surveyed by MarketWatch had expected an initial-claims level of 362,000 for the most recent weekly data.
To reemphasize, congressional Republicans are prepared to reverse this progress very quickly by refusing to compromise on the sequester, but today's report is a reminder that the job market, before our elected lawmakers hurt us on purpose, is showing clear signs of real improvement.
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 10 of the last 12 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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Oh, another 7 days have passed so we get another "Jobs" story with the same graph....
The problem with the upbeat news is that showing a graph that records how many people have given up trying is hardly a cause for optimism. The real graph has to do with what our employment to population ratio was in 2008, and where it is now. Here is is at the Federal Reserve (Fred graph of EMRATIO). That is the real measure of our progress on Jobs and it is at best flat or going down, not up.
It is sad we are talking about what the GOP wants us to talk about. We need to be talking about Jobs Jobs Jobs. If the response is, the administration needs Congress. Well- looks look at the things the President can legally do without Congress. For example:
Articles on Maddowblog since December 20, 2012:
Really? Austerity 5 times more important Jobs?!? If it isn't then why the obsessive distraction with the shining object the GOP wants you to spend your time on?
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Worse- in the moments jobs are discussed, if you look at the Jobs articles you will see they are forumulaic, with the same 2 charts over and over and over and over.....
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This is progressive journalism?
Erratum- fiscal cliff and sequester article counts suffered from some double counting. The correct number for austerity articles is closer to 73 articles, not 116.
Austerity articles outnumber Jobs article by better than 3 to one, not the 5 to one ratio stated originally.
I apologize for the error.
The fish stinks from the head. You stop the stink by decapitating the fish. Till then, keep sniffing.
Wow. I thought I was dark.
John,
The topic of "the future of employment" is probably worthy of creating a "Nation" for discussion - you might consider it.
Some points:
1. Out-country outsourcing will continue unless there is Government intervention.
2. Out-country outsourcing will continue to steadily erode high paying "intellectual" jobs. If the work can be done at a computer - it can be outsourced.
3. Further automation and increased communication will reduce, at an ever increasing rate, even low paying jobs both in this country and overseas. (Search for warehouse picking systems and consider Moore’s Law.)
4. Further automation and increased communication will reduce the number of humans needed in the areas of art, music, education, and computer programming.
(No need to hand paint “cels” for cartoons or hire a symphony orchestra to record a demo of your new opus.)
5. High paying jobs will still exist, but will be accessible to an ever decreasing portion of the population as the tasks become more intellectually complex. (Forcing all high school students to take more math and science will not give us more mathematicians and scientists - it will simply lower average GPA's. Making advanced courses available to those who have the ability to succeed, on the other hand, might work. Consider variations of the Pareto Principle.)
6. At some point the "expectancy" portion of Expectancy Theory will kick in with the general population. (If higher education does not consistently lead to jobs that pay well enough to justify the expense, fewer and fewer students will make the attempt.)
Sure. But not only are there not enough of those jobs to employ the US middle class, but the number of those high paying jobs is declining. This has been documented by respected economists, and their data appears in reports not in obscure journals or political publications but in commissioned reports from the federal reserve. (MIT's David Autor article for Fed -SF's Community Investments publication- see figure 1).
So there is a high level recognition of this problem of there being a knife at the throat of the middle class. Is it that the danger not recognized or taken seriously? It is not hyperbolic to conclude that as the wealth of consumers is allowed to fade away, then so too will our economy which is 70% based on consumption.
And yet, the President is up there advocating better high tech education- as if this were a standard labor dislocation problem.
Keynesians recognize that the purchasing power of consumers is a resource to be protected as any exhaustible natural resource. There is a market failure because the drive for labor cost reduction is resulting in capital starvation of the consumption cycle. The problem is that the market forces only indirectly feel that pain with the signal of reduced consumption, which in turn leads to more labor force reductions.
For the market forces to properly function, the externality- the cannibalization of middle class wealth- has to be internalized as a measurable cost that they need to optimize for. This sort of game theory approach to manipulating dynamic systems is not the ham fisted Twentieth century approach to industrial policy that neoliberals rejected. No- this accepts the strength of markets to find optimal solutions dynamically. The difference is that government must intervene to impose rules that faithfully represent an unrecognized externality that threatens the survival of the market itself.
Are you following me? What I am saying is that corporations need to be rewarded for replenishing middle class purchasing power, and penalized for retarding it. There are many sorts of schemes for doing this, but as an example for discussion, consider the idea of taxation based on comparison of gross revenues versus the number of middle class jobs supported either directly by the company or in its supply chain. If a company due to its technology was inherently low labor requirement, they could buy a credit analogous to the carbon credit scheme. Labor intensive/ low margin activities, for example USPS, would have a surplus of employment tax credits that low employment/ high margin companies could buy in order to avoid confiscatory taxation.
This sort of scheme would be a way of letting the market decide dynamically how to sustain sufficient replenishment of middle class wealth to keep the consumer economy going. Some arms length agency like the Fed would have authority over measuring the height of the rivers so that purchasing power water was neither reduced to zero nor overflowing the banks.
There are undoubtedly many many other schemes that would achieve the goal of sustainable management of this national resource necessary for our consumer economy. One thing should be clear-there is a market failure here and we should be discussing this knife held to our throats, and what means of intervention is best suited to address the challeng.
Create a Nation or at least seed an article - too much to discuss - I hate to see useful discussion consigned to two day old articles. We both agree that government intervention is required - we differ on its nature.
This is not progress, it is the result of people losing hope of getting a job. More or less new jobless claims do NOT mean anything regarding the state of the work force.