The good news is that unemployment claims are trending back down after the spike three weeks ago, the bad news is that they are still stubbornly high as the four week average of new claims rose by 7,500 to 405,250.
Weekly jobless claims came in slightly worse than expectations, seasonally adjusted applications for U.S. unemployment benefits (week ended Nov. 24) were down 23,000 (compared to prior week) to a 393,000.
Economists were looking for about 390,000 claims to be filed as the effects of Sandy dissipate.
We also saw initial claims from two weeks ago revised up to 416,000 from an original reading of 410,000, which doesn’t help. In fact, revisions have added to the number of claims 99% of the time over the past year, there are seldom reductions in the numbers when you look over the last 4 years.
Data Improving, But Fiscal Cliff Still Looming
Several weeks ago I noted the specific effects of Sandy on employment here in the U.S. and how they might manifest themselves in our employment situations, next week’s ADP and BLS reports should give us an even clearer picture.
Aside from Sandy, which was more of a temporary economic setback, the fiscal cliff and it’s “solution” or lack thereof could really take the slightly positive trajectory we have been on and send it sharply in the other direction.
Even the initial reading of 2.7% for Q3 GDP we saw this morning could quickly evaporate.
The employment numbers are far from stellar and when you consider that 1,263,000 Americans filed for unemployment in the last three weeks and yet we are only adding about 130,000 jobs on average per MONTH for the past three months, one has to wonder just how good things are.
Sure there are many variables here and with workers changing jobs, moving, etc, unemployment claims are always going to be higher than what we see in terms of new jobs added, but I don’t particularly like the trends I am seeing in employment, especially given what we are up against in 2013.
I personally think that a true solution to our debt and deficit problems will have a marked negative effect on our economy has programs are slashed and taxes are raised; after the initial rally in equities on a deal (if one is struck), I see the fragile jobs market losing even more steam and unemployment remaining high for the 1st half of 2013.
Do you all agree, disagree? Can employment in America actually get stronger with higher taxes and less government spending?
(The upward move in GDP from 2.0% to 2.7% for Q3 looked like it got a nice goose from government spending and I suspect there will be major cuts for the coming year if this is going to work)