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View Diary: Initial applications for jobless compensation seem to be on a new plateau. But what does it mean? (49 comments)

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  •  While not a home run for job growth... (2+ / 0-)
    Recommended by:
    TomP, TexasTom

    low initial claims numbers like these are unambiguously good news.  

    •  No. High numbers would be unambiguously bad, but (3+ / 0-)
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      JerryNA, Odysseus, HeyMikey

      low numbers are less meaningful in an economy like ours.

      A bad economy tends to depress frictional unemployment because new jobs are harder to find, and impulsive quits are tempered.

      A long-term bad economy also depresses layoffs because companies tend to be running at depressed staff levels already and the weakest companies have already gone bust.

      LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

      by dinotrac on Thu Sep 26, 2013 at 09:24:41 AM PDT

      [ Parent ]

      •  Disagree. (0+ / 0-)

        Initial unemployment claims have historically not tracked total job separations; there is very low correlation between the two.  Rather, initial claims have historically been high when involuntary separations (layoffs---a bad thing) are high relative to voluntary separations (quits---actually a good thing) and low when quits are high relative to layoffs.  Evidence suggests that's what's happening now; while total separations are still low relative to the last recovery, quits are rising and layoffs are falling.  And it's the change in this mix, rather than people being locked in their jobs, that is primarily causing initial unemployment claims to fall.

        Layoffs are at their lowest level in more than a decade.  Unambiguously good.  Yes, as you note, many companies have cut headcount about as much as they can.  But people aren't getting canned anymore en masse, and that is a good thing.  Plus this is good news for the future as headcount can only rise.  Fewer layoffs necessarily mean fewer unemployment claims.

        Meanwhile, quits are rising, albeit slowly, and quits now outnumber layoffs 3:2.  Also good.  Quits generally mean people are leaving to take---or look for---better jobs.  As seen during the last recovery (2004--07), more quits don't necessarily translate into more initial unemployment claims (e.g., if a new job is lined up in advance).

        I agree we all want to see hiring rising faster.  But I maintain that fewer initial unemployment claims is a good thing.

        •  In addition to the hiring caveat, there is one... (1+ / 0-)
          Recommended by:
          Eric Nelson

          ...other: the percentage of people working part-time remains very high, though it, like the overall unemployment rate has come down. And that "part-time for economic reasons" category probably only includes a small portion who are afflicted by furloughs because most report themselves as full-time workers even though they really aren't.

          Don't tell me what you believe, show me what you do and I will tell you what you believe.

          by Meteor Blades on Thu Sep 26, 2013 at 10:44:28 AM PDT

          [ Parent ]

          •  This is a vexing one... (1+ / 0-)
            Recommended by:

            "Part time for economic reasons," as a percentage of the population and as a percentage of the labor force, rose significantly in the wake of the 2007--09 recession to about the same high level as was seen during the years following the 1980-80 "double dip" and 1991 recessions, as well as a couple recessions in the late 1950s/early 1960s.  While it has come down a bit, it remains elevated.  However, the "part time for economic reasons" category remained relatively low, as a percentage of the same, after the 1970 and 2001 recessions and didn't spike nearly as much after the 1973 recession.  I don't know how much underreporting there is in this category, but there must be some characteristic that differentiates the the first group of recessions above (where part time for economic reasons rises significantly) from the second group (where that category remains subdued).  I have no idea what that characteristic might be.

        •  Feel free to disagree, but we are in an (2+ / 0-)
          Recommended by:
          Eric Nelson, HeyMikey

          unprecedented economy.  What history should you use for comparison?  The Reagan recession? The Clinton recession?

          Long term unemployment is at levels not seen since the Great Depression.  Wages are not merely stagnant, but going down for all but the top earners.  The middle class has lost a giant hunk of its wealth.

          Comparisons with the past should be taken with giant blocks of salt.

          I will grant you this:  In the most trivial sense, fewer layoffs is likely to be better than more layoffs, but even that isn't absolute.

          Imagine the most extreme case:

          There are 2 employers left. One has 1,000 employees, the other 500.

          The first goes bust and lays everybody off.
          The next month, the second goes bust.

          Nice little trend line -- cause for rejoicing for uncritical number watchers:


          Life is wonderful!
          Or not.

          LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

          by dinotrac on Thu Sep 26, 2013 at 12:05:07 PM PDT

          [ Parent ]

          •  JOLTS data go back only to 2000... (0+ / 0-)

            but there is a consistently close relationship throughout the entire period covered by the series between the relationship of quits to layoffs and initial claims.  Of note, the relationship was roughly the same both pre- and post-2008.

            I don't mean to make light of anyone's particular situation, but I don't think there is anything particularly unprecedented about the current economy other than it is only a few years removed from the deepest recession we've seen in generations.  I don't think it is constructive to put a negative spin on positive economic data, and almost every important economic indicator is pointing toward further improvement.  It takes a while to fully recover from a recession these days (similar to 1991 and 2001; Krugman has explained this many times), and I am very optimistic about the next three to five years.

            •  I suppose a Chicago Lawyer might see it that way. (1+ / 0-)
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              Top earners are doing fine, I hear.

              I'm also optimistic, but I've been optimistic the last two years.
              Probably due to the fact that I started getting work and coming out of the hole I was in.

              But -- I know too many people who are not doing even as well as I am, and I'm a 60 year old man with no hope of retirement.

              LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

              by dinotrac on Thu Sep 26, 2013 at 01:13:07 PM PDT

              [ Parent ]

      •  but (3+ / 0-)
        Recommended by:
        Aquarius40, Eric Nelson, Odysseus

        You can't file for unemployment if you quit, can you?  If you just mean an impulsive quit allows someone else to get hired, that wouldn't seem  to have a net effect on the job market.  Someone would have to 'impulsively' quit and then start their own business.  No idea how common that was ten years ago or now.  Quits have been trending upwards since 2010, but are only about halfway back to prerecession levels.

        •  You normally can not. Thanks for the (0+ / 0-)


          On the other hand, you can stay in a job long enough to be laid off because you didn't quit and go someplace else.

          LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

          by dinotrac on Thu Sep 26, 2013 at 12:06:21 PM PDT

          [ Parent ]

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