Jobless Claims (4-Week Moving Average) Fall for 15th Week to 15-Month Low
CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Thursday, December 17, 2009
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- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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The Labor Department said Thursday that the number of new jobless claims rose to 480,000 last week, up 7,000 from the previous week. That was a worse performance than the decline to 465,000 that economists had expected.
The four-week average for claims, which smooths out fluctuations, did fall, dipping to 467,500, the 15th straight decline, viewed as an encouraging sign that the labor market is gradually improving. The four-week average is now at its lowest point since late September 2008, the period when the financial crisis was hitting with full force.
Unemployment claims have been on a downward trend since this summer. That improvement is seen as a sign that jobs cuts are slowing and hiring could pick up as soon as early next year. But the rise in weekly claims of 7,000 last week, which had followed an increase of 19,000 the previous week, shows that the improvement has been halting.
Economists closely monitor jobless claims, which are considered a key gauge of the pace of layoffs with continuing claims viewed as an indication of how quickly laid off workers are getting new jobs.
Analysts believe that claims need to fall to about 425,000 for several weeks to signal the economy is actually beginning to add jobs.
The govenrment said that the number of people receiving regular benefits rose by 5,000 to 5.19 million for the week ending Dec. 5. That figure does not include millions of people who have used up the regular 26 weeks of benefits typically provided by the state and are now receiving extended benefits for up to 73 additional weeks, paid for by the federal government.
The people receiving extended benefits jumped to 4.73 million for the week ending Nov. 28, an increase of 143,759 from the previous week. That big rise reflected the fact that a total of 17 states are now processing claims for the extension of benefits that Congress approved last month.
You're good at the positive spin. "claims rose this week" becomes "claims fell compared to 4 weeks ago", which then is truncated to "claims fell".
Good job keeping up the spirits of the troops.
Claims have just risen for the second week in a row and are 24,000 higher than the week ending November 28. So what does that tell you is going to happen to the 4-week MA next week?
Do you need a hint? How about three guesses?
Ummm, not so side with the negativists, but, yeah.
a) Many people who have been out of work for a long time had their benefits expire at the beginning of November.
b) The state of Florida, and perhaps others, have taken their damned sweet time in getting the voted-for extension out for people to apply for -- i.e., those extension benefits Congress voted for in the first week of November are still unavailable in Florida, five and six weeks later -- which means, I am quite sure, that there are "no claims being made" by those people during this time frame.
In short, this factoid does NOT mean anyone's found a flinkin' job.
:-/
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