Layoff activity remains relatively low

New claims for unemployment have been relatively flat this year, down about 8% or so from year-ago levels. This is consistent with continued, albeit sluggish, economic growth. The Challenger tally of announced corporate layoffs (second chart above) tells a similar story. Nothing much happening here, but at least there's no sign of any deterioration in the economy.

If there is one bright spot in the labor market, it is the ongoing decline in the number of persons receiving unemployment insurance: 20% fewer people today (1.3 million) are receiving unemployment checks than were a year ago. This motivates people to find and accept a new job, even one paying less than they would have liked. In a slow-growing economy, this is unfortunately the only way that excess labor can be absorbed: the price of labor has to decline. Extended unemployment insurance payments only serve to slow that process.