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Under the radar: Some trends are obvious enough and visible to all investors. Others are more-subtle, but are just as potent, and these often slip 'under the radar.'Case in point: U.S. continuing claims for unemployment. They fell by 148,000 to 6.69 million, the U.S. Labor Department announced Thursday. If the downtrend in 'CCs' is sustained, that would represent another 'green shoot,' -- or sign that the U.S. recession is bottoming.
However, don't conflate a bottoming recession with strong GDP growth. It's far from it. Further, U.S. unemployment, a lag indicator and currently at 9.4%, will likely continue to rise for at least six months -- perhaps as long as a year -- after the recovery starts.
Second, given the depth and length of the recession, an enormous amount of work remains. Here's one indicator of the task for policy makers and business executives alike: the U.S. economy has to add about 200,000 jobs per month – a roughly 100,000-net-job gain over the monthly gain needed to keep unemployment from rising -- for the next 5 years just to replace the 5.7 million jobs lost during the recession.
Hence, the decline in continuing claims is welcome, but it's just the first, small victory in a large and long battle.
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Financial Editor Joseph Lazzaro is based in New York.
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Reader Comments (Page 1 of 1)
6-18-2009 @ 7:56PM
Daniel said...
How about the likelihood that the unemployment claims fell because people are running out of unemployment benefits. Hardly a victory.
6-19-2009 @ 12:25AM
Boffomega said...
I am not sure but as I recall when a person's unemployment checks run out they are then not counted in the official number, although their pain is just getting worse.
6-19-2009 @ 9:33AM
Mike said...
The above two commenters are right, all we heard when Bush was in office was anytime unemployment claims fell, it's that people "were giving up finding work!"
Lazzaro
6-19-2009 @ 11:56AM
Iridium said...
We are at the six month window after the highest level of initial claims. People are running out of benefits, not finding work. Nearly all of them will try to get on the federal program, many will be denied.
The only thing keeping the economy going was unemployment checks. Within the next three months the benefits for the majority of the unemployed will be running out. Unless the fed funds the extended unemployment program with a few hundred billion dollars the ability for people to pay thier bills will decline drasticly.
Because of the way the unemplyoment numbers are counted we may get a dramitic decrease in the claims number but not add any significant job growth. We'll simply add millions to the uncounted mass.
Why did the election of Obama cause eveyone to lose perspective of reality? Why are people unwilling to look past the headline and report the real story? This is how dictatorships are born. In six months we have already created one.