Improvement in jobless claims

The Department of Labor reported this morning that initial claims for unemployment fell by 34,000 last week to 388,000.  The decline was so large that the total initial jobless claims figure is at its lowest level since July 2008 – a moment right before the Great Recession slammed workers everywhere.

Because this data is estimated statistically it is often vulnerable to inconsistency.  Therefore, it behooves us to look at a more stable number.  The four week moving average of new claims of unemployment fell 12,500 claims to a total of 414,000.  This is also the lowest level recorded since July 2008.

Analysis: I cannot wait for the day when the business press and this blog no longer have to focus on the unemployment situation in the U.S.  But for now the data remain very important.  People need jobs in order to have money.  And the economy needs for people to spend that money.

Jobless claims data is one half of the unemployment equation.  It represents folks who have lost their jobs and have filed an unemployment claim.  So a reduction in jobless claims means that there are fewer people being fired.  However, the other half of the unemployment equation is: actual jobs being found by the unemployed.  This second half is the more critical half and we are yet to see a meaningful and sustained change in that data.

In the mean time, it is important that the initial jobless claims data is at its lowest point since just before the recession began.  In order for that unemployment rate to come down folks have to stop losing their jobs; and that is happening.

Importance grade: 9; ’nuff said.

Jason