Today's jobless claims report by the numbers

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It’s Thursday and that means jobless claims. Today’s numbers came in a little better than expected, which is good news, but the reported jobless claims number is still a brutal 545,000. The number that is more surprising to me is that continuing claims increased by 123,000 to 6.23 million. Why I’m surprised at that number is that tens of thousands are now exhausting their unemployment benefits. So even though thousands are exhausting benefits and falling off the rolls, the continuing claims number increased by 123,000. The increase shows just how difficult it is to find new work in this “jobless recovery.”

Still, the economy isn't improving fast enough to spur greater hiring. Jobless benefit claims have trended down since topping 670,000 in early April, but remain far above the 325,000 per week associated with a healthy economy.

New jobless claims drop unexpectedly to 545K

As the following graph from Calculated Risk shows, jobless claims are still at a high level (for a larger graph, visit : Weekly Unemployment Claims: Stuck at High Level)

It appears that initial weekly claims have peaked for this cycle. However it seems that weekly claims are stuck at a very high level; weekly claims have been in the high 500 thousands for almost 3 months. This indicates continuing weakness in the job market. The four-week average of initial weekly claims will probably have to fall below 400,000 before the total employment stops falling.

Weekly Unemployment Claims: Stuck at High Level

The report shows a small improvement with the weekly claims, but more hiring is needed to get people back to work and off the unemployment rolls before benefits are exhausted. Unfortunately we face a Catch-22; unless the consumer spends more, business is reluctant to hire, but the consumer isn't likely to spend more with employment so tenuous. If the billions in bailouts went to the people instead of the corrupt banking industry, the people would have spent the money, which would have increased hiring and the trickle up process would have been underway. But instead the billions in bailouts went to the unscrupulous and the trickle down method, which has produced few employment benefits, unless you consider the banking exec who hires a new accountant in order to better enjoy newfound bonuses, courtesy of the taxpayer, an employment benefit.

Eventually the system will heal and people will find jobs more easily, but the system as it stands needs to be reworked for the benefit of those who want to work. Trickle down economics has had its day and proved to be a failure to all but a select few; it's now time to employ a large dose trickle up economics, which will benefit those who need it most - the vast majority of American taxpayers.

I'll have more on trickle-up economics in the next post.

What do you think would be the best way to get the hiring engines going again? Are you seeing benefits from the billions in stimulus?

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