Claims continue to slowly decline. Weekly claims for unemployment have declined by about 23,000 per month, on average, since peaking at the end of March. If progress slows a bit going forward, as it usually does in the first year after the end of a recession, then claims might reach 400,000 per month in about six months. Coming out of the 2001 recession, that was the point at which the unemployment rate began to decline. So politicians could be very nervous for many more months, since we are not likely to see any significant improvement in the unemployment rate until the second quarter of next year at the earliest, if these trends continue.
Personally, I'd prefer if unemployment rates where to remain sacrificially high through November of 2010. I fear that the "visible" end of the recession will make its appearance just ahead of the 2010 elections -- bad timing for conservatives hoping for an election year win.
ReplyDeleteI sympathize. But even if the unemployment rate is falling, it will still be quite high, and the deficit is going to be gigantic. The Dems will not be able to escape being labeled the party of "spend without end and try to tax." That label is a killer, a real killer, given the current mood of the electorate.
ReplyDeletePersonally I would rather have a strong(er) economy and let the political chips fall where they may.
ReplyDeleteI'm pretty sure the economy will be stronger a year from now, but it will still be disappointing because we will be way below trend and unemployment will be quite high. It might be very much like what happened in the election of 1992: people were very upset with the economy, yet it was recovering nicely. Bush Sr. was voted out after one term. Only this time the Dem's transgressions (e.g., trillion dollar deficits and government takeovers of entire industries) will be much more ominous and obvious than Bush breaking his no new taxes pledge.
ReplyDeleteI support the view that the last year was an economic panic (similar to 1907), and we will recover. But I am disturbed by the less reliable household unemployment survey that showed another 588,000 loss of jobs in October. It confirms what I see in my city, small businesses are getting creamed and closing everywhere. Good for Target, McDonalds, etc., but small business doing very poorly. However, an entrepenuer friend of mine said this will be the greatest opportunity in a century to open, buy, and grow private businesses because of the collapse going on. Any comments on the massacre of small business jobs?
ReplyDeleteThe household survey can indeed be erratic. But so far both surveys are tracking each other fairly well in aggregate, but not on a month to month basis.
ReplyDeleteSmall business has certainly taken a beating, and Obama is not helping matters at all. Being an incurable optimist, however, I think your friend is right. When this country gets back on track we could see some tremendous growth opportunities.
This comment has been removed by the author.
ReplyDeleteJobless claimants receive benefits for up to 26 weeks... Once this is over, claimants are off the roll for the weekly initial jobless claims. This may explain why the unemployed rate is not moving down and why the initial jobless claims are going down and may not necessarily indicate an employment improvement.
ReplyDeleteThe initial weekly unemployment claims number is not impacted by the length of time that people get unemployment benefits. But the longer the period of benefits, generally the slower people are to go out and look for work. As usually happens in recessions, Congress extends unemployment benefits out of compassion for the jobless, but that also serves to delay the recovery.
ReplyDelete