Thursday, May 20, 2004

If due to reasons of health, citizenship or common sense you cannot join the United States Army, fear not. There is still room for you in the US reserve army of the unemployed!
In the week ending May 15, the advance figure for seasonally adjusted initial claims was 345,000, an increase of 12,000 from the previous week's revised figure of 333,000. The 4-week moving average was 333,500, a decrease of 2,750 from the previous week's revised average of 336,250.
For an economy supposedly in robust recovery mode, this uptick in jobless claims is surprising. The FT reports today that "Economists assume that any figure below 350,000 is consistent with an expanding jobs market." and thus try to asuage us that this news really isn't all that bad. But looking at the larger employment picture gives one little comfort.

Jobless claims first dipped below the magic 350,000 mark in late December 2003 but sustained a sub-350,000 level only by late February/early March 2004. Since that time, the lowest weekly seasonally adjusted jobless claims number has come in at 318,000 and spent two weeks in mid-April above the 350,000 line. Now the four-week moving average is 333,500; below the 'expanding jobs market' line, but only by a whisker.

The overall US jobs picture is still pretty bleak. This George W. Bush jobs recession is now at 38 months, the longest since the Great Depression and with no end in sight. For comparision, his father's lasted 37 months; under Reagan, 25 months; under Nixon/Ford, 23 months; under Nixon, 20 months; and under Carter, a mere 10 months. The US economy is still down 2.26 million private sector jobs from its February 2001 peak and at the most recent growth pace will fully recover only in 10 months time. And did I mention that real wages in the private sector have been stagnant for 18 months?

Is the jobs situation in the US "getting better"? Well, of course. Like every sick patient, you do one of two things: get better or die. But this is still the most drawn-out, languishing process of "getting better" since the 1930s.

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