Thursday, January 21, 2010

Weekly claims update

Weekly unemployment claims were higher than expected, but blips like this happen all the time. The 4-week moving average hardly budged, in fact. I see no signs that would suggest the economy is about to turn down. We're still on track for a moderate recovery.


Bill said...


Are you concerned that Obama will pivit left to satisfy his base and try to pass a bunch of crazy regulations that will hurt the banking and other industries, thus derailing the recovery? I've heard some pundits say that he may try that strategy in response to the Scott Brown victory in an attempt to "energize" his base, whom some believe failed to show up in Mass because they feel he's gone soft on some of his initial socialist ideas.

Anonymous said...

extended payments increased by about 613,000 to 5.92 million. US is far away from creating new jobs.

Scott Grannis said...

Ed: that's a very good point. The ranks of the long-term unemployed have swelled enormously, thanks to congressional largesse. When you have permanent benefits offered to you as an unemployed person, the incentive to find work goes way down.

We can still create new jobs, but they will be harder to fill. This adds up to a sub-par recovery, which is what I continue to believe we will see.

Scott Grannis said...

Bill: From what he has been saying, it appears that he is trying to do just that: appeal to his base. This is the typical strategy for every politician that runs into trouble with the majority of the electorate. But it's one of those negative feedback situations. The more he appeals to his base, the more he will alienate everyone else.

Clinton was a brilliant politician. When faced with adversity, he triangulated and appealed to the majority. Obama is unfortunately not so blessed, and so he is likely to continue to lose power and popularity. The only positive however is that he will also boost the fortunes of those who believe in smaller government.