US Jobless Claims Fall To 1970s Levels – Maybe This Is Good, Maybe Bad – Forbes

We’ve a mixture of two sets of jobless numbers today which, taken together, can be read in either a positive or negative manner. It really depends upon the story that you want to tell over what is happening. The initial jobless claims number has bounced up a bit but by nothing that looks like anything other than statistical variation to 244,000. And the continuing claims number has dropped below 2 million. Something it’s only done once before in this expansion, before that in the glory days of the Clinton boom and consistently not since the 1970s. We could therefore say that we’re doing great, unemployment is low, the flow into it is low, super! We could also get all Eyorish and worry that we’ve not got enough people flowing into unemployment and also that the low continuing claims means that our actual unemployment problem is going to be harder to crack than ever.

Up to you which side of the story you want to run with really.

The numbers:

After reporting a slight drop in first-time claims for U.S. unemployment benefits in the previous week, the Labor Department released a report on Thursday showing that initial jobless claims rebounded in the week ended April 15th.

The report said initial jobless claims climbed to 244,000, an increase of 10,000 from the previous week’s unrevised level of 234,000. Economists had expected jobless claims to rise to 242,000.

That little bounce, don’t worry about it. We should expect a weekly number in something as large and complex as the American economy to bounce around almost at random by that sort of amount.

The smoothed-out four week average is 243,000, a small decrease from prior weeks when claims averaged closer to 250,000. Claims have stayed below 250,000 for most of this year.

That random variance being why the cool kids tend to use the four weekly moving average. As I’ve noted before these jobless claims are in fact rather lower than we think they are:

U.S. Jobless Claims Fall to 234,000 in Latest Week
Number of Americans newly applying for unemployment checks remains at historically low level

These numbers only go back to the 1960s. And as we can see we are back to those historically low numbers.

However, the labour force is about twice the size it was back then. Meaning that the rate is around and about half what it was back then.

And here’s our thing. We’re really very sure that economic growth comes from change. Changes in the jobs that people do, changes in the companies making the things and the way that they make them. We’d thus like to see a large turnover of labour. Sure, we don’t actually want people to be unemployed but we would like to see them changing jobs. Thus we could argue–perhaps not very hard but the concern is there–that initial jobless claims at half the rate of the 60s is showing that there’s not enough vibrancy in the economy. We could also say that it’s just great that people aren’t losing their jobs.

Which brings us to the second point, about continuing claims:

The number of out-of-work people collecting unemployment checks fell to a 17-year low in April, underscoring the strongest U.S. labor market in years.

So-called continuing jobless claims fell by 49,000 to 1.98 million, marking just the second time they’ve fallen below 2 million during the current eight-year-old economic expansion. Continuing claims also dipped below the 2 million mark in March.

As you can see this is pretty unusual historically:

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