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Chart on jobless claims 12-13-12
Seasonally adjusted first-time unemployment benefit claims for the week ending Dec. 8 fell to a 58-month low of 343,000, according to Department of Labor statistics released Thursday. For the comparable week of 2011, the number was 371,000. The latest number was a decrease of 29,000 from the revised 372,000 claims posted the previous week. Not only does this indicate the impact of Hurricane Sandy on first-time claims for unemployment benefits has been shaken off just five weeks after the storm ravaged the east coast, but it's also an encouraging sign for the labor market overall. But there are caveats.

Post-Hurricane Sandy claims peaked at 451,000 the week ending Nov. 10 and have been dropping steadily since then. A better gauge that flattens volatility in the weekly figures is the four-week running average. That number also fell, to 381,500, which was 27,000 less than the previous week.

For the week ending Nov. 24, the number of people claiming benefits in all programs, including extended "emergency" benefits funded wholly by the federal government, was 5,642,678, an increase of 683,477 from the previous week. For the comparable week in 2011, the total number claiming benefits was 7,449,508.

But if Congress and President Obama do not reach an agreement on the fiscal impasse, some 2.1 million of those Americans will lose their benefits as of Dec. 29. Another 900,000 will lose their benefits if no agreement is reached by April 1.  

Throughout 2012, first-time claims have mostly stayed within a range of 360,000-380,000. That's a reflection of what is still sluggish growth in employment. If the 343,000 number indicates a move to a new plateau, that would be a good thing. But, as always, the holiday season is a bad time to make bets on the long-term trend of claims. Especially so given the bigger jobs picture.

Although the Bureau of Labor Statistics reported last Friday that a seasonally adjusted 146,000 new jobs were created nationwide in November, a better than expected performance, revisions for job creation in October and September were downward. To bring the unemployment level from its current 7.7 percent to where it was at the beginning of the Great Recession by the end of 2014 would require new job creation averaging about 270,000 a month.

In the first two months of 2012, that was exactly what was happening. Predictions of a rosy year for the labor market were everywhere. But they didn't last.

By the second quarter, seasonally adjusted job growth was in double digits. And, while job growth rose appreciably in the summer, it remains at about half what is needed for a quick return to the relatively healthy pre-recession numbers. Meanwhile, 12 million Americans are still officially unemployed. And when you count those who are underemployed and those who say they would like a job but are so discouraged they have stopped looking for one, the figure rises to 27 million.

The slackness in job growth is reflected in the sluggish growth of the gross domestic product.

Predictions are that growth in inflation-adjusted—"real"—GDP calculated on an annualized basis is going to clock in around 1.2 percent for the fourth quarter of 2012. That would mean GDP growth for the entire year would be about 1.7 percent. Which is below the 1.8 percent of 2011, which itself was a drop from the 2.4 percent in 2010. Earlier predictions that 2013 would be significantly better have recently been revised downward. They are now mostly predicting it will fall below 2 percent for at least the first half of 2013.

Not at the Federal Reserve, however. On Wednesday, it released projections of GDP growth for next year of 2.2 percent to 3.0 percent and official unemployment of 7.4 percent to 7.7 percent. As a consequence wholly expected by "the market," the Fed has decided to move ahead with a fourth round of quantitative easing. It will keep interest rates near zero until the unemployment rate reaches 6.5 percent and seek to hold inflation within a half of a point of its long-term 2 percent target. Keeping the interest rate down will entail continued purchases of Treasury securities in the $40 billion a month range.

Given that the Fed's projections of GDP growth over the past few years have been consistently over-optimistic, there's good reason to believe that this so-called QE4 could last a long time. The question is whether it will finally break the economic logjam. There are, as there have been for more than two years, mixed signs. Housing finally seems to have hit bottom and prices are rising in some markets. Since housing construction has been a big driver of past economic recoveries, this could be a good omen. Retail sales, also a big driver, were reported up 0.3 percent in November over October. But in October, they had fallen 0.3 percent.

As usual for the past couple of years, the news is up and down, and uncertainty, even without mention of the fiscal impasse in Washington, is rife. While all these acute economic matters remain unresolved, the chronic ones—income inequality, wage stagnation, off-shoring of jobs and a host of others—have yet to be touched. Nor are they likely to be until economic recovery reaches far more people than it has yet done. We keep hearing that this outcome is just around the corner, just as we have since early 2010.

 

Originally posted to Daily Kos Labor on Thu Dec 13, 2012 at 02:26 PM PST.

Also republished by Daily Kos Economics, Unemployment Chronicles, and Daily Kos.

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Comment Preferences

  •  The Fed's been shooting blanks for awhile (7+ / 0-)

    Otherwise, the economy wouldn't need a QE4 (not that it will change anything).

    Bernanke's got his eye on the only ball that matters -- the debt limit and fears that there will be even a hint of trouble approving a hike, which could be a catastrophe for US foreign investment cash flows.

    Meanwhile, the fiscal cliff (a term that Bernanke himself coined early in 2012) has sobering implications. Note his actual comments regarding what's about to happen:

    "The U.S. economy is already being hurt by the "fiscal cliff" standoff in Washington. The uncertainty surrounding the resolution is already affecting consumer and business confidence. And it has led businesses to cut back on investment."
    “If fiscal policy becomes very contractionary, the economy, I think, will go off a cliff,” he said. “I don’t buy the idea that a short-term descent off the fiscal cliff would not be costly … in fact we’re already seeing costs.”
    “There’s a problem with kicking the can down the road,” Bernanke said. “It could create concerns about our longer term fiscal situation … it’s in the best interest of the economy to come to a two-part solution.”
    In economic-speak, he says here that if the scheduled tax hikes and spending cuts do take effect in January, they will have a significantly adverse effect on the economy (recession) and there is nothing that the Fed can do to stop it:
    "Monetary stimulus cannot offset the so-called fiscal cliff, the more than $600 billion package of tax increases and spending cuts that will come into force early next year if politicians fail to agree on a new federal budget."
    And his final Hail Mary pass:
    "We cannot offset the full impact of the fiscal cliff. It's just too big."
    “It’s always a delicate balance. You don’t want to scare people, and I actually believe that Congress will come up with a solution. It’s exceptionally urgent and important that Congress and the administration come to a sensible agreement.”
    Will the US show the world that the Federal government is completely paralyzed and unable to conduct the nation's business?

    Or, will President Obama and Speaker Boehner come up with some sort of deal at the last minute?


    A child of five would understand this. Send someone to fetch a child of five. -- Groucho Marx

    by Pluto on Thu Dec 13, 2012 at 04:18:31 PM PST

  •  Structural unemployment is the big problem. (3+ / 0-)
    Recommended by:
    Mr Robert, winsock, Pluto

    Let this one sink in:

    Public Policy Briefs: "What Can We Learn by Disaggregating the
    Unemployment-Vacancy Relationship?" from Rand Ghayad and William Dickens at the Boston Fed. 2012.

    http://www.bostonfed.org/...

    This analyzes the Beveridge curve. It shows the relationship between unemployment and job vacancies.

    In the 1970s the Beveridge moved right. More open slots made less of a dent in short- and long-term unemployment.

    -- What we've got here is more open jobs, but no fall to the unemployment rate.

    -- Add that to the long-term rate. Long-term is off the scale. Look at this graph and you see long-term unemployment at a level never seen before.

    What should this mean to Republicans ??? About the same thing it means to pet dogs and cats. They don't read.

    What should it mean to capitalists ? That we've got a big problem as individuals in the labor force stay unemployed longer and longer, drifting to unemployability.

    Long term unemployment is poison.

    •  Long-term unemployment is definitely poison... (3+ / 0-)
      Recommended by:
      Pluto, bontemps2012, glitterscale

      ...but only a portion of joblessness is structural unless one believes that all those numbers of people who were previously employed before the Great Recession began suddenly lost their skills. The structural part has a lot to do with corporations not be willing to pay a decent wage to the people who DO have the skills.

      Don't tell me what you believe, show me what you do and I will tell you what you believe.

      by Meteor Blades on Thu Dec 13, 2012 at 09:30:49 PM PST

      [ Parent ]

      •  Mismatches of skills, location, and the bizarre (0+ / 0-)

        unwillingness to hire the unemployed -- all contribute to structural unemployment.

        You're missing this one: "The structural part has a lot to do with corporations not be willing to pay a decent wage to the people who DO have the skills." That's backwards.

        Structural unemployment has corporations generating larger numbers of open slots, but there being no one out there to fill them.

        The Great Depression continued the devastating 1920s conversion of farm laborers to manufacturing and service jobs. This was a pure example of structural unemployment. Farm laborers had one helluva time of it. They were illiterate. They did not speak Standard English. They drank hard liquor as a social competition.

        Read the Boston Fed paper.

        if you need help with the economics, drop a message at dkos. There's lots of econ jargon. Stiglitz:

        -- http://www.vanityfair.com/...

        Good start. Compressed. The books are more of it.

        The banks got their bailout. Some of the money went to bonuses. Little of it went to lending. And the economy didn’t really recover—output is barely greater than it was before the crisis, and the job situation is bleak. The diagnosis of our condition and the prescription that followed from it were incorrect. First, it was wrong to think that the bankers would mend their ways—that they would start to lend, if only they were treated nicely enough. We were told, in effect: “Don’t put conditions on the banks to require them to restructure the mortgages or to behave more honestly in their foreclosures. Don’t force them to use the money to lend. Such conditions will upset our delicate markets.” In the end, bank managers looked out for themselves and did what they are accustomed to doing.
        Structure changed fundamentally, because the on-going Balance Sheet Recession strangled business development, strangled bank lending.

        Stiglitz gets the core of it 100%. But blaming on bankster selfishness is a step too far.

  •  I'd like to see numbers on additional payroll (3+ / 0-)
    Recommended by:
    winsock, Pluto, glitterscale

    ..as much as numbers of "claims." Average the new jobs paychecks and it's a living wage?

    For too many people the "recovery" is a mirage that someone else is seeing, and explaining to them in excruciating detail.

    The dire straits facing America are not due poor people having too much money

    by Anthony Page aka SecondComing on Thu Dec 13, 2012 at 05:44:37 PM PST

  •  I would be one of those 2.1 million (4+ / 0-)
    Recommended by:
    winsock, Pluto, Sarenth, glitterscale

    Thank the goddess that it looks like I will have a job commensurate with my skills and seniority by the middle of January.  I've had to dip into my savings even with unemployment comp.

    "Republicans have been fleeced and exploited and lied to by a conservative entertainment complex." - David Frum

    by Glinda on Thu Dec 13, 2012 at 08:14:42 PM PST

    •  Congratulations (1+ / 0-)
      Recommended by:
      Glinda

      In the not-so-fine print of the GOP propaganda, they think that if only people like you didn't have unemployment money coming in, you'd work harder earlier to get that next job.

      From what I overhear riding the buses, I suspect there's some truth to that, for some people -- but also a lot of delusional thinking.

      This, from people who've never been unemployed in their entire lives, and will slide (like Jim DeMint) seamlessly from one six-figure job -- with full health insurance -- to another.

      May the new year bring you brighter prospects.

  •  There is a much larger point being missed here (3+ / 0-)
    Recommended by:
    Mr Robert, offgrid, mtnlvr1946

    If the fiiscal cliff was really so important, and Obamacare so destructive, then these numbers should have seen significant increases since the election

    That they haven't says a great deal about what drives the decision to hire and to layoff.  It is demand that rules the business world.  

    I don't really get why the liberal blogsphere isn't jumping up and down and saying if the fiscal cliff is such an issue, why are jobless claims DECLINING.  Bondadd and NDD  sent an e-mail to a group this morning noting this, and no one really had much of an answer.  Only Barry Ritholtz mentioned it at all this morning.

    Yes, seasonality and all that, and we have seen this before. No, these don't suggest an economy in a strong recovery. But there is nothing in the recent jobless claims that suggests we are near a recession.

    And that is more than worth noting given the current political debate.

    The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

    by fladem on Thu Dec 13, 2012 at 08:20:56 PM PST

    •  One possible reason for the decline (2+ / 0-)
      Recommended by:
      mtnlvr1946, glitterscale

      in jobless claims is that fewer and fewer people qualify for unemployment. You have to work for a certain number of months to qualify and if you're going through serial layoffs you may not qualify.

      The only trouble with retirement is...I never get a day off!

      by Mr Robert on Thu Dec 13, 2012 at 08:32:56 PM PST

      [ Parent ]

    •  Well, if 3 million folks lose their... (1+ / 0-)
      Recommended by:
      Pluto

      ...unemployment benefits over the period of a few months given the very modest levels of GDP growth, it could happen. But I think we're just more likely to see these levels continue: a few decent months of job creation plus a few mediocre to rotten months for yet one more year in a recovery that is now 42 months old. If bonddad's and NDD's (and others') support for a modern WPA had been listened to where it counts, we'd be a lot further out of this mess now. But it wasn't.

      It wasn't all that long ago, however, that certain of us here were ridiculed for saying that job recovery would take 60 or so months to return to the December 2007 peak. We are now at that 60-month interval, and those of us who made our worries public on that score turn out to have been overly optimistic.

      Don't tell me what you believe, show me what you do and I will tell you what you believe.

      by Meteor Blades on Thu Dec 13, 2012 at 09:44:04 PM PST

      [ Parent ]

    •  Well, there is holiday hiring going on (1+ / 0-)
      Recommended by:
      glitterscale

      Also, unemployment is not necessarily a leading indicator. Additionally, a great deal of the impact will come from reduced  exports (due to reduced imports, due to snatching tens of millions out of consumers pockets). Not to mention job losses as a lagging indicator due to cuts in defense and government jobs.


      A child of five would understand this. Send someone to fetch a child of five. -- Groucho Marx

      by Pluto on Thu Dec 13, 2012 at 10:21:11 PM PST

      [ Parent ]

  •  Dang... (0+ / 0-)

    That will make for a Merry Christmas ...

  •  If those unemployment numbers (3+ / 0-)
    Recommended by:
    Sarenth, glitterscale, George Hier

    Dont count a a national emergency, what the fuck does?!  Quit piddling around with 39.6% tax rate for the top 2%, and demand what we REALLY need.  Demand 70%!

    •  Which will lower (0+ / 0-)

      the unemployment numbers how, exactly?

      Things work out best for those who make the best of the way things work out.

      by winsock on Thu Dec 13, 2012 at 08:45:24 PM PST

      [ Parent ]

      •  We COULD use that extra money (0+ / 0-)

        to fight the ills of global warming, creating desalinization plants along the coast line and creating pipelines across the country to deliver clean water. And use it for wind and solar and geo thermal installations and a modernized grid and wifi system. AND then we could use it for all the reefs we will have to create along the coast lines and the infrastructure that we have so long neglected in roads, sewer systems and schools. We could hire teachers and give our kids a true education and not the farce we have created in the last 10 years.

        But what the hell, it is only survival!

        American Television is a vast sea of stupid. -xxdr zombiexx

        by glitterscale on Fri Dec 14, 2012 at 09:37:51 AM PST

        [ Parent ]

  •  I hope someone can answer this question: (1+ / 0-)
    Recommended by:
    Pluto

    I only take temporary jobs.  This has been my choice since I became eligible for Social Security (it wasn't before then, but that's another story).

    Right after Christmas, I will be unemployed again - also by choice.  My question is, do I show up in the unemployment figures even though I am still registered with the temp agency and really only between assignments?  Or am I considered employed as long as I am on the agency's roster and never try to collect unemployment?  

    I am ignorant on this subject.

    "May the forces of evil become confused on the way to your house." - George Carlin

    by Most Awesome Nana on Thu Dec 13, 2012 at 08:39:19 PM PST

    •  You show up statistically. The unemployment ... (2+ / 0-)
      Recommended by:
      Pluto, glitterscale

      ...rate is calculated via a survey of 60,000 households. Those who say they are working are counted as employed, whether they are part-time or not. Those who say they aren't working but looking are counted as unemployed. Those who they aren't working and aren't looking (and haven't looked for 12 months or more) aren't considered part of the labor force, so they aren't counted in either category.

      Don't tell me what you believe, show me what you do and I will tell you what you believe.

      by Meteor Blades on Thu Dec 13, 2012 at 09:47:37 PM PST

      [ Parent ]

    •  Two separate ways of counting (0+ / 0-)

      1. people collecting unemployment -- you don't show up here because you're not.
      2. the household survey -- you would show up here (if you were called), depending on how you answer the question. IMO the questions don't really take into account people like you (or me).

      The government also keeps tabs on what's happening in the temp market, because it's a leading indicator -- companies thinking of expanding often hire temps first, and I suspect with the health care law that will become even more common.

      Then there's the "U6" measure that also counts people who are working part-time but want to work full-time -- you probably would answer "no" to that, and I don't think they count "people working part-time temp who would appreciate getting more hours than they had last week."

      All the measurements are estimates and approximations.

      •  Thank you. (0+ / 0-)

        I had never really thought about where I fit on the employment survey until I read this diary.  Most of the time I was busy ranting about vulture capitalists buying up companies and ruining careers or companies that had blatant age discrimination (both of which have been personal experiences).  

        And then I wondered if people like me - sort of employed but not looking for anything more - skewed the figures for good or ill.   I suppose if I show up anywhere, it is in the temp agency figures.  

        I have no idea why this subject is stuck in my head!   A form of avoidance?  :)

        "May the forces of evil become confused on the way to your house." - George Carlin

        by Most Awesome Nana on Fri Dec 14, 2012 at 09:43:21 AM PST

        [ Parent ]

  •  And millions were cut off last summer due to (0+ / 0-)

    Congressional bill that cut folks off if there lived in States with unemployment at a certain rate--something like 7.9%.

  •  Not numbers (0+ / 0-)

    So these people are no longer looking for jobs..

    Think about this just for a few seconds..

    No more money.. pack what you can carry and put it into a car....leave house in car drive till you run out of gas ...

    Then sit there in the coming cold with your family "husband wife children and then .............Die..

    that is not a number that is whats going to happen..

    I think Jesus meant christian as a verb not a noun

    by rageagnstmach on Thu Dec 13, 2012 at 10:02:15 PM PST

  •  Doesn't Sandy recovery help in medium term? (0+ / 0-)

    I guess I see why the storm caused a spike in unemployment, as businesses in the affected area had to close at least temporarily. But now that the debris-clearing and rebuilding has started up, doesn't that create jobs for all manner of contractors, crane operators, building materials suppliers, drywallers, etc.? -- jobs paid for out of insurance funds and FEMA grants and all that?

    If a house just sits there, it doesn't generate jobs except once in a long while when the front porch needs repainting. But if you have to tear it down and build a new one, that's LOTS of jobs.

    It's one of the weird ways GDP counts economic activity, but it is a back-door form of stimulus.  

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