There is no good news in unemployment statistics these days, only bad news that is slowly getting less bad. And so it is today. The number of Americans filing for unemployment benefits fell for the third straight week. The four-week average for new claims is now at its lowest point since January. But still, 25,000 people filed for jobless benefits for the first time last week. The big lesson is simple: The unemployment tsunami has crashed and receded, but thousands of jobs are still getting pulled out by the tide.
Calculated Risk, which consistently does the Lord's work
by putting together easy to read and understand graphs of the day's
economic reports, presents this picture of first-time jobless benefit
claims. As you can see, claims are still higher than at any point since
the early 1980s, but they are on the way down.
Why does this graph matter? Because some economists see a drop in weekly jobless claims as the most important short-term indicator of a recovery. The Economic Cycles Research Institute has called the recession over by pointing to the peak in jobless claims. Robert Gordon, economist from Northwestern University, said that recessions tend to turn around four weeks after the peak in jobless claims -- which would be now. So even though last week's jobless claims were slightly higher than analysts predicted, for many economists, they paint the picture of economy that is about to turn around. Now as for that recovery...