Jobless claims trend downward, but unemployment rate still stuck

filing for unemployment benefits

Weekly U.S. jobless claims used to be a reliable indicator of recovery, but current conditions defy a statistical explanation. Image: CC public15/Flickr

Finding good news when it comes to the U.S. unemployment rate requires extremely low expectations. Jobless claims rose last week, but not as much as economists expected. Employment has been growing steadily as the number of people filing for unemployment insurance has held steady, but not enough to budge the 9.6 percent U.S. unemployment rate.

Why the unemployment rate won’t budge

Jobless claims rose a whisker last week, by 2,000 to 439,000, according to the Labor Department. But the Associated Press reports that less than 440,000 people a week have filed for unemployment insurance in three of the past four weeks — the lowest numbers in two years. Over the past month, jobless claims dropped by 16,000 to an average of 443,000 per week — a 4.2 percent average decrease. According to AP, the trends are a signal that more people are getting hired than fired. But economists say jobless claims must fall below 425,000 a week to put a dent in the unemployment rate.

The plight of the unemployed

As hundreds of thousands of freshly unemployed workers file jobless claims every week, the number of people who had been collecting unemployment fell by 48,000 in the week ending Nov. 6. That doesn’t necessarily mean they got hired. People whose unemployment benefits have expired that have moved to federal unemployment extension programs  rose by 121,000 the last week of October. Meanwhile, up to 2 million people will lose benefits when the emergency extensions expire at the end of November. Another 2 million will lose benefits in the next few months. It’s unlikely a lame-duck congress will be able to pass another federal unemployment extension.

Statistics fail to offer clarity

Economists keep close track of weekly firings in the form of jobless claims because the numbers used to be a consistent indicator of economic recovery when they drop. But Bloomberg reports that during the current tepid economic recovery, that relationship appears to be reliable no longer. Companies added 159,000 jobs in October, the fourth straight month more than 100,000 jobs were created. Yet some companies continue to lay off workers while others are hiring. Forty-two states and U.S. territories reported rising jobless claims, while 11 reported a decline. Amid all the confusion, the key statistic that matters, the 9.6 percent unemployment rate, remains stubbornly unchanged.


Associated Press



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