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Initial claims for unemployment insurance have fallen to very low levels. Continuing claims for unemployment insurance are now very close to their all-time lows. Those currently employed face a very low risk of losing their job, and removing the distortions created by excessive unemployment insurance should lead to a healthier economy.
Initial claims for unemployment were somewhat lower in 2000 than they are today, but back then the economy was growing at a 4-5% pace and today it is growing at only a 2.5-3% pace.
But relative to the size of the workforce, initial claims are as low as they have ever been. The chances of a worker being fired in any given week are now about 0.2%.
Since the end of last year, and thanks to the expiration of the "Emergency Claims" program, the number of people receiving unemployment insurance has dropped by more than half, from 4.65 million to now only 2.07 million. This has removed a substantial amount of distortion from the labor market, since roughly 2 ½ million people this year have found themselves with an added incentive to seek out and accept a new job offer.
3 comments:
Dallas FED Fisher expects 3% real GDP from now on. Three percent is enough to solve most problems in a matter of a few years.
I talk to a lot of people and they are afraid of losing their jobs because they don't think they can replace them at the same wage if they are young, and replace them at all if the are older. It makes for very cooperative workers and low claims.
I will become an optimist when I see wages and salaries growing enough to change the psychology of the average working sucker.
Because the unemployment rate is down wage increases should be coming along very soon. Wage increases lag a drop in unemployment.
It is what I am monitoring for the success of the economy.
Happy I am to see unemployment rolls and insurance fall.
But that ain't the half of it.
There are now 12 million Americans collecting SSDI and VA "disability".
These programs are runaway fraud at this point. There are cottage industries of doctors and lawyers and coaches who help applicants fabricate claims, and know the ropes.
So which do you like---a few million people collecting unemployment for a set time frame, or 12 million people collecting "disability" for decades?
Obviously, the "disability" scam dwarfs lazy people on unemployment problem.
For some reason mainstream media and economists seem to miss this one.
Joe Constable---
I like your commentary, but Fisher has been dead wrong on everything for six straight years, including his daily warnings of runaway inflation.
Maybe, by sheer luck, Fisher is right this time. Most likely Fisher just says what he says as he wants to Fed to tighten up, which is what believed in 2007, 2008, 2009, 2010, 2011, 2012, 2013 and present.
According to Fisher, the current inflation rate should be about 452.8%.
I want to know what the economy cannot grow 4-5% real like it was before Bush and Obama got into office. Or why mainstream economists say "Well, 2 percent growth is the best we can hope for."
Defeatism is rampant.
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