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Much has been made of the fact that weekly claims for unemployment have failed to fall below 400K for 17 or 18 weeks. From a purely historical perspective, 400K claims per week is indeed pretty high, considering the average of the past 40 years is 375K. But from a relative perspective, which acknowledges that today's workforce is much larger than it was 40 years ago, weekly claims are relatively low. The chart above shows claims as a percent of the number of people working; over the past 40 years that has averaged 0.36%, whereas today it is only 0.3%.
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The unemployment claims numbers in the US are really quite small as a percentage of the total population -- moreover, the reality is that the long-term unemployed in America will probably never work again in the US anyway -- what is needed is more public information about available overseas jobs that might be of interest to the long-term unemployed and their families -- the government could even provide free transportation incentives for the unemployed in order to promote emigration to other countries -- providing the unemployed with complimentary transportation to leave the US might be a super conservative method for dealing with the unemployment distraction in the US -- whatever it takes to get back to business as usual, right...? Marginalizing the unemployment problem is not helpful for those who are enduring unemployment right now...
There's been mention recently about how hard it's been for the 99'ers to find employment (been on unemployment 99 weeks).
My theory is that these folks were the first to be laid off and that most employers may interpret that as a bad sign -- as in, the first to be laid off usually represent the weakest workers for a company.
Excellent chart and perspective Scott. Thanks for your posts during these challenging times.
Scott: Thanks for continuing to put things in perspective. There's quite a bit of hysteria out there.
I wonder, do you have a sense (or data) as to the numbers or percentages of jobholders who may have moved to entrepreneurship or self-employment as an option? (And possibly may not be moving back to the workforce as defined by BLS?)
Is there a likelihood this portion of the workforce has increased -- also reducing the need for companies to increase headcounts?
(Some may be contractors out of necessity, but many are taking the freelance or entrepreneurial route by choice.)
Just to clarify my last statement: Many individuals may prefer an entrepreneurial situation to 9-to-5 jobs. If there's anything this economy needs more of, it's entrepreneurial energy!
In a post discussing the numbers released today, Brian Wesbury mentions that manufacturing is just now recovering from Japan-related supply disruptions and also, wages are up at a 3.5% annualized rate.
http://www.ftportfolios.com/Commentary/EconomicResearch/2011/8/5/non-farm-payrolls-increased-117,000-in-july-and-revisions-to-mayjune-added-56,000
No disasters, unless, of course, you are looking for work.
The percent of civilians in the labor force dropped about five percent in the recession, and have never recovered. One in 20 people you see used to work, but now isn't. Mostly, they want to work. I don't sense the work ethic in America has suddenly declined.
A huge loss of output, not to mention the human costs.
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