Modest Unemployment News

Thursday is the day each week when we get a glimpse at the trend in employment. The weekly data for new claims for unemployment assistance provides us with a general idea of what is going on in the job market. So today’s news that new claims dropped again, to 502,000, is a small but welcome sign that the skies are brightening a little.

The depth of this crisis has reduced us all to looking for even the tiniest rays’ of hope on the employment front. Today we can at least acknowledge that the trend seems to be moving in the right direction – albeit very slowly. The four week moving average has dipped a little as well, down to 519,750, and a slight positive movement seems to be settling in.

Having said that I have to note that this week marks the 52nd straight week with claims over the 500,000 mark, which is a simply horrible record, and with the unemployment rate now above 10% the chances of our getting a decent job market going is remote at present. Business is still battened down as if there is no prospect for growth in the medium term. Until private businesses come out from their respective hiding places and start to expand the unemployment outlook will remain grim.

In this context I should also note that this morning’s news included data on long term unemployment: continuing claims fell by 139,000 last week to around 5.63 million. I caution anyone taking too much solace from that number though: we cannot tell whether the drop is due to people getting jobs at long last, or whether they simply have run out of their ability to claim unemployment assistance.

I would guess the latter.