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Thu Dec 13, 2012, 08:52 AM

Jobless claims improve sharply, match four-year low

Jobless claims improve sharply, match four-year low

By Steve Benen



With the economic effects of Hurricane Sandy starting to subside, it was widely expected that we'd see an improvement in initial unemployment claims, but few thought the new report from the Department of Labor would be this good.

New applications for U.S. unemployment benefits fell by 29,000 to a seasonally adjusted 343,000 in the week ended Dec. 8, putting claims at the second lowest level of the year, the Labor Department said Thursday. Initial claims from two weeks ago were revised up to 372,000 from an original reading of 370,000, based on more complete data collected at the state level. Claims are now below pre-Sandy levels and near their lowest point in about four years. Economists surveyed by MarketWatch expected claims to decline to 370,000.

To put this in perspective, this new weekly total matches the best unemployment-claims report since President Obama took office nearly four years ago. It exceeds expectations in a very encouraging way, though Congress may yet screw things up.

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In terms of metrics, when jobless claims fall below the 400,000 threshold, it's considered evidence of an improving jobs landscape, and when the number drops below 370,000, it suggests jobs are being created rather quickly. We've been below the 370,000 threshold just three of the last seven weeks, though the further we get from Sandy, the more these figures should improve.

Above you'll find the chart showing weekly, initial unemployment claims going back to the beginning of 2007. (Remember, unlike the monthly jobs chart, a lower number is good news.) For context, I've added an arrow to show the point at which President Obama's Recovery Act began spending money.

http://maddowblog.msnbc.com/_news/2012/12/13/15883660-jobless-claims-improve-sharply-match-four-year-low




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Reply Jobless claims improve sharply, match four-year low (Original post)
ProSense Dec 2012 OP
OldDem2012 Dec 2012 #1
ProSense Dec 2012 #2
OldDem2012 Dec 2012 #3
ProSense Dec 2012 #4
pinqy Dec 2012 #5
OldDem2012 Dec 2012 #6

Response to ProSense (Original post)

Thu Dec 13, 2012, 08:56 AM

1. On the other hand, we're seeing an increase in seasonal part-time employment by the....

....retail outlets for the Holiday shopping season. That will be off-set when most, if not all of those people are let go after the Holiday shopping season is over.

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Response to OldDem2012 (Reply #1)

Thu Dec 13, 2012, 09:10 AM

2. That doesn't necessarily follow.

A strong holiday season does wonders for the economy.

First, seasonal retail hiring was very strong in November (see 3rd graph below). There is a fairly strong correlation between seasonal hiring and holiday retail sales, and this record seasonal hiring suggests a solid holiday season.

http://www.calculatedriskblog.com/2012/12/employment-report-more-positives-than.html


It's unlikely that the number will remain below 350,000, but it's possible to see numbers below 370,000, in line with the trend prior to Sandy.

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Response to ProSense (Reply #2)

Thu Dec 13, 2012, 09:20 AM

3. Temporary part-time seasonal Holiday hiring happens every year along with the....

...laying off of the same workers once the Holiday seasonal hiring is over. The numbers of those receiving unemployment benefits go down prior to the Holidays, and then go back up to the usual levels once the Holidays are over.

That has nothing to do with whether or not the economy will receive a shot in the arm from Holiday retail sales this season. Retailers have been stating how good their Holiday sales will be for the last several years only to quietly state what really happened to their sales numbers once the Holidays are over.

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Response to OldDem2012 (Reply #3)

Thu Dec 13, 2012, 09:34 AM

4. I understand what you're saying, but

Temporary part-time seasonal Holiday hiring happens every year along with the....
...laying off of the same workers once the Holiday seasonal hiring is over. The numbers of those receiving unemployment benefits go down prior to the Holidays, and then go back up to the usual levels once the Holidays are over.

That has nothing to do with whether or not the economy will receive a shot in the arm from Holiday retail sales this season. Retailers have been stating how good their Holiday sales will be for the last several years only to quietly state what really happened to their sales numbers once the Holidays are over.

...my point is that this season is much stronger, and every little "shot in the arm" helps. Yes, there is always a drop followed by an uptick, but I made reference to the trend prior to Sandy. The economy is holding on, and anything can shake that foundation, which is why stimulus is needed, but the trend is positive. Any uptick post the holiday season will be assimilated by a continuing positive trend.
Notice the jump in January 2010 versus 2011 and 2012.

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Response to OldDem2012 (Reply #1)

Thu Dec 13, 2012, 09:53 AM

5. Do you think the statisticians never thought of that?

The numbers are seasonally adjusted to account for regular patterns.
For today's report, the actual number of initial claims dropped 72,000 but was seasonally adjusted down to -29,000.

Similarly, the Employment Situation for November had an unadjusted increase of +367,000, seasonally adjusted down to +147.000

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Response to pinqy (Reply #5)

Thu Dec 13, 2012, 09:58 AM

6. I'm not even sure statisticians think at all. nt.

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