Jobs: That’s Better!

Amidst all the stupid hysteria about the weather – as if we haven’t seen big storms before – news about the economy has been hard to find. Perhaps that’s good after all the rotten news we’ve been deluged with for the last couple of years. Still it’s nice to emerge from the igloo and read that there has been a slight pick up in the jobs market. It is slight, and it is one data point, but maybe this is good news.

This morning we learned that last week new claims for unemployment assistance dropped by 43,000 to 440,000. Now that is much better. The last few weeks have been worrying because the improving trend in claims for unemployment that had appeared last fall stalled from November through late January. Indeed the numbers had started to back up and reverse some of the earlier gains. At the time there were a variety of very credible reasons given for the adverse trend: bad reporting, administrative delays at the state level, and possibly flawed seasonal adjustments were all cited its potential cause. Obviously each week that went by without an improvement undermined the notion that there was a technical reason for the ‘bad’ data, and we were forced to confront the idea that, maybe, the data was correct: things were stalling.

Today alleviates those fears and allows us to take a more encouraging view: the labor market is showing signs of ending its dismal run.

This does not mean that it will suddenly break into a canter and run away into growth. Far from it. But we need these early steps towards better times if we are to see overall improvement throughout this year. At the moment the White House is predicting job gains of about 95,000 per month, on average, for the year. Since we are through January and lost 20,000 so far, that looks like a stretch. Even if we meet that prediction unemployment will not fall much because the labor force grows by more than that much. Each month we fail to add about 100,000 jobs we fall further behind population growth. Remember this comes after the last decade which was the worst on record: a mere 400,000 jobs added in ten years while the population grew 33 million.

So, what do we make of this morning’s news?

If we were at school: “shows improvement”. We all know that means “not good enough, but better”.

That’s where we are right now.

But, definitely showing improvement.