JOBLESS CLAIMS POINT TO JOB GAINS
31 December 2009 by Cullen Roche
6 Comments
Jobless claims continue their slow grind lower. The latest reading of 432K was substantially better than the expectations of 460K. Claims have made a dramatic improvement from their April peak of 658K. Perhaps most important is the vast improvement in continuing claims. Continuing claims came in at 4.98MM this week versus their cycle high of 6.77MM earlier this year. All of this points to jobs gains in 2010. Next week’s jobs report is currently pointing to a flat jobs report, but this data is almost certain to turn into jobs gains by early next year. The tepid pace of gains is a clear sign of the weak recovery, but a recovery no less.
While this is better news than jobless claims 700,000 per week, it still takes the creation of between 100,000 – 150,000 jobs a month JUST to break even when considering new entrants into the job market.
And the declining number of people on the continuing claims list is likely a matter of people falling off the list due to unemployment benefit exhaustion. The numbers look better because you can’t count those on continuing claims if they can’t continue to claim those benefits. The continuing claims list will shrink rapidly if Congress doesn’t continue to extent benefits into next year.
Yes, a better picture and hopefully new jobs are created at a clip of 350,000 a month, since, according to the BLS, there are 15.4 million that are currently unemployed. Also, the BLS states: “The number of people working part time for economic reasons (sometimes referred to as involuntary
part-time workers) was little changed in November at 9.2 million.” So employers are more likely to add hours to the part-timers than hire new workers. So we have a 24.6 million workers that are either unemployed or working part-time out of a civilian labor force of 153 million http://www.bls.gov/news.release/empsit.t01.htm.
“That’s why Harvard University economist Kenneth Rogoff believes the unemployment rate could peak at over 11%. “The U.S. would need to add a good 11 million jobs to bring the unemployment rate back to where it was at the start of the crisis, and over 9 million jobs just to get unemployment back to 6%.”
http://www.businessweek.com/magazine/content/09_49/b4158020729243.htm
It will take 36 months of 250,000 jobs added a month to get the unemployment rate back down to 6%. And that doesn’t include the 150,000 needed just to break even. If you include that, then the US needs to create 400,000 jobs a month for 36 months to get unemployment back to 6% in three years.
And where are those new jobs? Jobless claims fall to 452,000 – the lowest level since 09/08, but where are the jobs? | The Layoff List. http://www.layofflist.org/?p=5978
Let’s hope that 2010 brings a healthy job market, since so many need jobs for any true, not just bank bonus, recovery to take hold.
Best to all in 2010!
Add in the number of people falling off continuing claims and into the emergency claims numbers then redo the analysis.
For the week ended Dec. 12 EUC claims increased by 191,669 to almost 4.5 million.
Not anywhere near as rosy, I think.
Great news that jobless claims are down. But for those who are still unemployed, here’s some simple tips on maintaining your American lifestyle:
http://bit.ly/ozqT6
(satire)
Any stats on the extended benefits side? Are they going up?
Never mind. Thanks Rick… yeah that does take some of the shine off of the trend. While it is still improving other data don’t confirm that there is job growth to the extent that Continuing Claims are falling.
Check out the JOLT data…the Online Monster Job Demand Survey. It still hasn’t strongly signaled a pick up..in fact it dropped last month
On the “adding only Temp” workers thesis, we do see that Temp workers from the jobs report in November are increasing as is the American Staffing Association Index.
So while we are headed in the right direction, initial readings seem to suggest that only temp workers are being hired.
Lets not forget that the engine of job creation is small business and initial reports from the Discover Small Business Watch point only to very marginal improvement. Nothing that would tell us that there is permanent hiring on a wide basis.
http://www.discovercard.com/business/watch/
happy new year to all
what’s the point of listening to any of these numbers, every one of them is so adjusted and so seasoned, where are all those unemployed that can’t claim no more are being hidden ? and what’s going to happen to those numbers when all them hollyday gift wrappers and flower arrangers are back on the street ? I guess keep adjusting and keep it all well seasoned and we’ll never really know what we’re eating, is this so right that its almost alarming ? where is this economy going ?
ike t