Unemployment: Time to Celebrate
New claims made a significant push below 400k today. Since I’ve been making a big deal about this level for over a year, I felt it appropriate to set aside time from my vacation to comment on this. This is a number worth celebrating. For how long, I could not say. My view is pessimistic to be sure. And there are other aspects of the labor market not worth celebrating. The unadjusted numbers are going to look horrible in the coming weeks. People will be exhausting their extended benefits in near-record numbers. But those persistent problems should not detract too much from a labor market that has stabilized to the point where jobs added are quite likely to stick around. This is good news, necessary news, and it is worth celebrating.
The Unemployment Insurance Weekly Claims Report has a headline new claims number at 388k. This bested the Bloomberg consensus range of 414k to 425k. From the report:
In the week ending Dec. 25, the advance figure for seasonally adjusted initial claims was 388,000, a decrease of 34,000 from the previous week’s revised figure of 422,000. The 4-week moving average was 414,000, a decrease of 12,500 from the previous week’s revised average of 426,500.
The advance seasonally adjusted insured unemployment rate was 3.3 percent for the week ending Dec. 18, an increase of 0.1 percentage point from the prior week’s unrevised rate of 3.2 percent.
The advance number for seasonally adjusted insured unemployment during the week ending Dec.18 was 4,128,000, an increase of 57,000 from the preceding week’s revised level of 4,071,000. The 4-week moving average was 4,120,000, a decrease of 37,250 from the preceding week’s revised average of 4,157,250.
The unadjusted numbers, those that correspond to actual people instead of trends, look significantly less celebration-worthy. This is to be expected this time of year.
The advance number of actual initial claims under state programs, unadjusted, totaled 521,834 in the week ending Dec. 25, an increase of 24,879 from the previous week. There were 556,517 initial claims in the comparable week in 2009.
The advance unadjusted insured unemployment rate was 3.3 percent during the week ending Dec. 18, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 4,095,135, a decrease of 85,886 from the preceding week. A year earlier, the rate was 3.9 percent and the volume was 5,088,864.
The total number of people claiming benefits in all programs for the week ending Dec. 4 was 8,866,924.
It is worthwhile to track that total figure. People who leave that figure due to expired benefits have a habit of disappearing from official labor statistics.
I’m going to skip the good and bad lists this week because they only dilute the important message this week. Next week’s lists will look bad (corresponding to this week’s 24,879 additional new claims on the unadjusted data).
Similarly, I’ve been on vacation, so there is no “In other news…” this week.
This was a spectacular report. We’ve broken the 400k barrier. This is the level that correlates to an environment of permanent job additions. Celebrate for a bit. Once you are done, pause for a moment to consider that we’ll have to start adding a lot of jobs to make a dent in our current unemployment rate. Then celebrate again and have a happy new year.
Still catching up after the holiday. I’ve been waiting for this post for a long time!
