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Claims continue their slow but relatively steady descent from the highs of last March. At this rate we might see claims back to some "normal" level by perhaps the fourth quarter of next year. The unemployment rate is unlikely to go much higher than it already has, but it is not going to drop significantly by the time elections roll around next year. Another "jobless recovery" is likely to be one of the election memes.
9 comments:
Better for Dems if unemployment stays high so they can argue we really need all the stimulus, govt. programs like health care, etc?
I suspect the disappointing recovery will be ammunition for those who think the stimulus was a gigantic waste of money. Maybe it will even focus attention on how the stimulus could have been structured in a more supply-side fashion. And of course the deficit will be gigantic. A terrible albatross for the party in power to carry into the election.
The stimulus started with George W and the Republicans...
And you're absolutely right. That was bad stimulus also. Between the failed Bush stimulus and the failed Obama stimulus, I'm hopeful that no politician will ever be able to propose another Keynesian stimulus plan.
Thank you for keeping us up to date on these numbers, Scott.
Just a casual observation, but I can't help but notice that this graph, if inverted, seems to be a mirror image of the equity market.
Blake: excellent observation. The inverse of claims does indeed track the equity market pretty closely for the past year. It's worth noting that equities started rallying about 3 weeks before claims peaked; otherwise they seem to move at about the same time.
So if you feel pretty confident that claims are going to continue to decline, that would be an excellent reason to be bullish on stocks. Lots of room on the upside for stocks, since claims have a long way to fall before they return to normal.
The Bush stimulus was bad, for sure, but he also presided over the credit expansion that created the false prosperity and the banking crisis. Now that Geithner and Bernanke have transferred all the costs to the tax payers our financial community thinks every thing is peachy.
Today's zero interest rate policy will produce similarly bad results, although it seems quite clear that individuals are not going to embark on another credit funded spending binge. My guess is that leveraged financial speculation by people with access to "free" money will once again become the talk of the world -- until the next crisis erupts.
It seems like California was the first to enter the recession in 2008 with the housing collapse, do you see this new unemployment number as a trend that might spill over into other states?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXkFNFPR0gsY
I don't think we'll see significant improvement in the employment stats for awhile. It's a lagging indicator in any event. Keep your eye on the more important things that are changing on the margin.
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