The Department of Labor reports that for the week ending August 4th, jobless claims saw a minor decrease. The number of claims fell by 6,000 to a seasonally adjusted 361,000. While all decreases are good, the small drops are not nearly as favorable as consistent, larger decreases. The four week average, on the other hand, rose by 2,250 to a seasonally adjusted 368,250.
More importantly than looking at the onetime numbers is to look at the longer term trends. Last year the first week of August saw initial jobless claims at 395,000. In just a year the claims have dropped nearly 9%. Likewise, the four week average last year at this time was 405,000. The latest report shows that the average has fallen by just over 9% since then. The country is moving in the right direction, and people are getting back to work. However, it has been a long and drawn out process. In order to reach numbers seen back in 2006 and 2007 when the economy was healthier, we need to start seeing jobless claims in the low 300,000’s. At the current pace that will be two more years.
Lately we have seen jobless claims up one week, down the next. There has been a great bit of volatility making it hard to get an accurate feel for how the labor market is actually doing. However, as patterns emerge we see that the report at the end of the first week of August indicates claims about the same level as seen in April. Between then and now, claims have bounced around wildly. Much of the volatility is attributed to seasonal adjustments regarding summer layoffs, many of which revolve around auto retooling (each summer the auto manufacturers shut down the plant to do major repairs and maintenance. During this time only key personnel are kept on while the rest of the employees are forced to collect unemployment benefits). There is no indication in this latest report that there is anything out of the ordinary.
Jobs are a major concern in the minds of many Americans. In fact, with the elections looming this fall, a great number of people will decide who they vote for based on who they think can turn the job market around. While steps are being made toward a recovering job market, Americans still need to get back to work. When jobs can be had, money will start to move in the economy. When the money moves, the economy strengthens and grows. Long term trends indicate we are moving in the right direction. That movement just needs to quicken its pace to ease the minds of those who are currently without a job.