Thursday, December 31, 2009

Labor Market Turns a Corner: New Jobless Claims Fall to 18-Month Low, Lowest Since July 2008


1. The number of people filing new claims for unemployment benefits in the U.S. unexpectedly fell in the latest week to its lowest level in 18 months, a sign the labor market may be turning a corner. Initial claims for unemployment benefits fell by 22,000 to a seasonally adjusted 432,000 in the week ended Dec. 26, the lowest level since July 19, 2008. Economists surveyed by Dow Jones Newswires had forecast claims would rise by 3,000.

2. Meantime, the Labor Department said in its weekly report Thursday that the number of people collecting jobless benefits for more than a week also continued to decline.The tally of continuing claims, or those drawn by workers collecting benefits for more than one week, fell by 57,000 to 4,981,000 in the week ended Dec. 19.

3. The four-week average of new claims, which aims to smooth volatility in the data, dropped by 5,500 to 460,250 -- marking its 17th consecutive drop. That was the lowest level since Sep. 20, 2008 (see chart above).

Wall Street Journal

10 Comments:

At 12/31/2009 10:10 AM, Anonymous Ryan said...

That may be good news. Too bad the Emergency Unemployment Compensation (EUC) number jumped almost 200k. For chart see: http://www.zerohedge.com/sites/default/files/images/user5/imageroot/volcker/EUC%20dec%2031.jpg

 
At 12/31/2009 11:24 AM, Anonymous morganovich said...

ryan-

that's an interesting stat. i have not been tracking EUC closely (or really at all).

does that essentially imply that by shifting the unemployed from state to federal rolls, they disappear from unemployment claims data (and possibly from U-3)?

 
At 12/31/2009 12:42 PM, Blogger Brad said...

Need to update the chart on this post...

 
At 12/31/2009 2:28 PM, Blogger bobble said...

there's a limit to how many workers a company can lay off and still function. it appears we have hit that level.

however, looking at the Emergency Unemployment Compensation (EUC) number, it is clear that few of the laid off workers in the U.S. are getting rehired. this week the EUC total hit a new high of 10.1 million.

just speculation, but it *could be* hiring has already begun, but we don't see it because its mostly taking place offshore.

 
At 12/31/2009 3:04 PM, Blogger Mark J. Perry said...

Brad: I couldn't find anything wrong with the chart, what do you think should be updated? Note: the chart shows the 4-week moving average.

 
At 12/31/2009 3:07 PM, Anonymous Benny "Tell It LIke It Is Man" Cole said...

Die recession, die, die, die!

I just hope the more positive trends of the last several months continue.

I wish prosperity to all posters here, especially my ideological opposites.

(BTW, I am only interested in a balanced federal budget--that makes me an "adversary" of the right and the left, though I regard all as fellow citizens).

 
At 12/31/2009 6:36 PM, Anonymous Dr. T said...

Bobble is correct. The decreasing numbers of newly unemployed only means that fewer workers have been fired in recent months. It says nothing about overall unemployment, which is still high. The official statistics also underestimate unemployment because people who are no longer looking for a job (because they failed to find one after months or years) are not considered unemployed.

 
At 1/01/2010 9:16 AM, Blogger sethstorm said...

The chart may be fine with the data that is there. The problem rests with the data itself being not sound.

That is, it's not counting the ever-increasing amounts of "discouraged/underemployed" that are in the U-6 numbers.


just speculation, but it *could be* hiring has already begun, but we don't see it because its mostly taking place offshore.

Indeed. That's why I'll say that the recovery does not begin until it begins in the US.

They might as well call it the "Benedict Arnold" recovery the way that offshoring is working. It's not so much a recovery as much as it's a non-consensual transfer to the Third World.

 
At 1/01/2010 6:12 PM, Blogger bobble said...

here's another look at the real trend in unemployment from zero hedge


" . . .the actual cash outlays by the Treasury suggest: the government spent a record $14.7 billion on Unemployment Insurance Benefits as of December 30, a 24% jump sequentially from the $11.8 billion in November. Yet the DOL has disclosed a mere 1.7% increase in those to whom insurance benefits are paid: from 9.4 million to just under 9.6 million."

 
At 1/03/2010 6:52 AM, Blogger Atlas said...

" It's not so much a recovery as much as it's a non-consensual transfer to the Third World."

That description sounds like force and coercion was involved in the transfer of jobs. But it's obvious that that profit maximizing companies in a free market are willingly transferring jobs from high cost geos to low cost geos. It's not good for Americans, and we would like to have our cake and ice-cream at the same time, but this is the accumulated free-market consequences of living beyond our means, borrowing excessively, and consuming wastefully in the past decades.

I'm not a famed economist and I assume that many posters here are great economists. I just don't think unemployed Americans are somehow victims of free trade.

Thanks for the informative employment data. It's an eye opener.

 

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