The Department of Labor reported this morning that the number of people seeking first-time claims for unemployment insurance benefits fell a seasonally adjusted 50,000 for the week ending Jan. 14 from the previous week's revised number of 402,000. The four-week moving average that analysts prefer because it flattens volatility in the weekly figures fell 3,500 to 379,000. The claims level is the lowest since the second week of April 2008.
A consensus of experts surveyed ahead of time by The Wall Street Journal had estimated a drop of 19,000. High volatility is common in the claims numbers this time of year, and because of the Martin Luther King holiday, the government had to use estimates for seven states. If the number holds up and claims remain in the vicinity of where they are now for another week, it will certainly firm up the cautious optimism that many analysts have been displaying toward a job market that has been stuck at a level that is barely absorbing the growth in the working-age population.
Continuing claims, which are reported with a one-week lag, clocked in 215,000 lower at 3,432,000. When federally extended claims are included, however, the number of Americans collecting unemployment benefits rose to 7,826,665, an increase of 493,566 from the previous week. Those claims are reported with a two-week lag.
While the drop in claims could be an omen of good news, just how far away anything approaching full recovery from the worst recession since the 1930s is was confirmed in a report by IHS Global Insight released to the U.S. Conference of Mayors on Wednesday. Only 26 of 363 U.S. metropolitan areas have seen employment rebound to the pre-recession peak in late 2007, the report stated.
“It’s very clear that there is a great deal of economic malaise throughout the country,” Los Angeles Mayor Antonio Villaraigosa, a Democrat who is president of the mayors’ group, told reporters in Washington. “Most of our cities will be struggling with their economies for another five years.” [...]
[Mesa, Arizona, Mayor Scott Smith, a Republican said:] “We are creating jobs, but not nearly as fast as we need to,” he said in an interview. “But I think the good news is that we’re not getting worse. After three years of uncertainty, it seems we have bottomed out.” [...]
“The prospects of doing anything in this Congress are small,” Villaraigosa said. “That doesn’t mean that we can’t keep on knocking on the door and demanding that these people do their jobs.”
Last year, the Democratic president’s proposed $447 billion economic-stimulus plan, including funds to prevent further job cuts by local governments, failed to win enough support in Congress, where officials are focused on curbing the nation’s budget deficit. Congress has also reduced the block grant program by $1 billion, which the mayors’ report estimates may have cost 35,000 possible jobs.
