The only information available today in the unemployment claims department is that nothing much is going on. First time claims for unemployment are right about where the 4-week moving average is, and right where the average for the year is. The employment situation is not deteriorating, but neither is it improving.
Looks like it normally takes a couple of years for a substantial and persistent decline, no?
ReplyDeleteEmployment may be about to start climbing. The election has blocked the continuation of the dems' socialist agenda, risk assets are appreciating and the Fed has business's back. New employees have been escewed for months because of fear and its close cousins uncertainty and doubt. Workers can only be worked so many hours a week and longer hours is the option that businesses have chosen. As GDP slowly improves, the new employee option may be the best one for many.
ReplyDeleteConfidence is a big factor, and it may be that the light at the end of the tunnel is getting brighter.
Turning this economy around is a long and slow process, but it's continuing. There is light at the end of the tunnel, we just need to be patient.
ReplyDeleteScott,
ReplyDeleteI think we've reached the point where the situations in *unemployment* and *employment* have diverged.
Total payrolls have increased by 613k since the series bottomed early this year. I can definitely see more payrolls being added to the market, while the unemployment level remains at a persistently high level.
I do agree with John's comment that new hiring is only a matter of time. Despite the top-calling by people looking only at 2nd derivatives, US inventories still have a quite a ways to go. Consumer credit (raw) finally expanded by $20B last month's reading, both Personal Income & PCE are at record levels, and employment statistics seem to be gaining some traction.
While the output gap may not get filled quickly, and unemployment may remain petulantly high, we can still grow & recover. There are mal-effects, but I think they are over-estimated -- especially in the shorter timeframes.