Jobless Claims Jump Higher Than Expected

Jobless Claims Jump Higher Than Expected

The Labor Department reported this morning that initial jobless claims jumped this week by 20,000, rising to 362,000. Economists had been expecting a slight increase to 355,000. The four-week moving average, a less volatile measure, also moved up to 360,000. The jobless claims number largely has been stuck in the 350-400,000 range since the Fall of 2011. 

Initial jobless claims are a good proxy for the overall labor market, as they provide real-time data on layoffs and firings. Claims above 400,000 generally signal a contracting job market. Claims around the 300,000 level signal an expansion of hiring. The levels posted over the past year and a half suggest a stalled labor market. 

Since the end of the recession, the economy has been unable to create the 250,000/month jobs necessary to keep pace with population growth. Last year, the economy added far less than that, averaging just around 183,000 jobs a month. This week’s report suggests the economy is still far from the job creation levels needed to ensure a strong recovery. 

Of course, the media has been quick to put a positive spin on the disappointing news. In its news round-up, NPR called today’s report a “mid-winter blip” that wasn’t all that big of a deal. The “mid-winter blip”, though, has stretched on for years. 

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