US jobless claims below 300,000: How good is job market getting?

Some 293,000 people filed claims for unemployment benefits in the past week – a lower-than-expected number and one that puts this indicator firmly back to levels last seen before the Great Recession.

|
Michael Ein/The Press of Atlantic City/AP
Recently unemployed casino workers meet with volunteers at the Atlantic City Convention Center, in Atlantic City, N.J., in September. More than 5,000 employees at the Showboat and Revel lost their jobs.

Some 293,000 people filed claims for unemployment benefits in the past week – a lower-than-expected number and one that puts this indicator firmly back to levels last seen before the Great Recession.

Does that Labor Department news mean all is back to normal with the US job market?

Far from it. But it is another tangible sign of improvements in the economy that are reducing the number of unemployed, helping more workers shift from part-time to full-time, and brightening hopes for pay raises in some quarters.

The number of weekly claims for jobless benefits is typically well above 250,000 even in the best of times, because of the “churn” or job turnover that’s typical in a large economy with more than 100 million workers.

Since the recession, though, jobless claims averaged well above 350,000 for several years into the economy’s recovery.

Only this year has the number – when tracked as a four-week average to smooth out the statistical “noise” – started to fall toward 300,000. Now, finally, we’re seeing numbers that echo conditions in years like 2006 or 1999.

The official unemployment rate has fallen close to 6 percent – again not far from what many economists call its “natural” rate.

In a late August poll by the Pew Research Center, 33 percent of Americans saw plenty of jobs available where they live, up six points since April and well above the low of 10 percent reached in the spring of 2010.
 
 Still, 58 percent in the poll said jobs are difficult to find.

So, again, it’s hard to call the jobs recovery anywhere near complete.

Consider that the number of Americans who are “long-term unemployed” is still nearly 3 million people – way outside the norm for this stage in an economic expansion. These are people who have been out of work and looking for jobs for at least half a year.

The number of long-term unemployed, although way down from a 2010 peak of 6.8 million, remains well above any level seen in a recession or post-recession going back to 1948. And this is five years after the Great Recession’s official end in June 2009.

Meanwhile, wages remain relatively stagnant against inflation, and economists estimate that many would-be workers remain on the sidelines – not counted as unemployed because they still don’t see the outlook as promising enough to engage in the job hunt.

“Although we have made great strides, a good deal of slack remains in the labor market,” Charles Evans, president of the Federal Reserve Bank of Chicago, said in a Washington speech on Wednesday.

Policymakers at the Federal Reserve are thinking hard about how to use monetary policy (keeping interest rates low) to encourage the fullest possible improvement in jobs and wages without rekindling inflation or encouraging damaging financial behavior such as a stock market bubble.

What more could be done?  Some economists say steps such as streamlining the tax code, pruning unneeded regulations would help attract business investment in the US.

Others urge stepped up government spending on infrastructure projects – which could have long-run payoffs for the economy even while boosting short-term job creation. Some forecasters also say that comprehensive immigration reform would help the whole economy grow faster – even as it improves jobs and wages for immigrants.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to US jobless claims below 300,000: How good is job market getting?
Read this article in
https://www.csmonitor.com/USA/Politics/DC-Decoder/2014/0925/US-jobless-claims-below-300-000-How-good-is-job-market-getting
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe