Jobless Claims Fall To 2 Year Low But Economy Still 'Treading Water'

It's a classic good news-bad news situation.

Last week, the number of Americans filing new unemployment claims fell to a two-year low. But while headlines point to this news as a hopeful sign of recovery, some economists are skeptical that the new data reflects anything other than an economy "treading water."

Initial jobless claims fell to a seasonally adjusted 383,000 in the week ending February 5th -- an improvement from the 419,000 jobless claims filed the previous week, according to the Labor Department's report.

The last time so few Americans applied for new unemployment benefits was June 2008.

This winter's inclement weather may have had an outsized effect on the data. "I think the key thing to understand about yesterday's report is that it may have reflected weather factors," said economist Dean Baker, adding that the majority of claims are still filed in person and severe weather can keep the newly jobless -- and state workers -- from reaching the unemployment offices.

"We know there was an issue about weather and the question is how big," Baker said. "My guess is: pretty big. But that's a pretty good guess because there was a big storm."

In early January, last time the number of initial jobless claims also dipped below 400,000 -- hitting that July 2008 low. But weather was also a factor, and the following week, jobless claims shot up again.

As far as when the decline in jobless claims might translate into job creation, Baker was not optimistic.

"We've been having very little job growth and nothing really convinces me that we've departed from that," Baker said, pointing to last week's report from the Bureau of Labor Statistics. The report, which economists found "confounding" showed the unemployment rate falling from 9.4 percent to 9 percent in January, with a scant 36,000 jobs added to the payrolls.

"There's still so much up in the air about the economy. We're seeing very modest growth -- GDP is growing at 3.2% -- that would be okay if we were at 4.5 percent unemployment. What we really want to see is three or 400,000 new jobs a month," Baker said. "As it is now we're not even getting 200, 250 [thousand]. We're doing a little better than treading water."

As Federal Reserve Chairman Ben Bernanke told a congressional panel on Thursday, "until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established."

Comments

[wuzupwidat]

08:04 AM on 02/15/2011

Here's a suggestion: Stop counting the people who are "no longer unemployed" and start counting the people who actually have jobs.

...if you really want to keep doing things the way you are then why don't you just be slightly less dishonest and make a category called PEOPLE WHO DON"T HAVE JOBS but are no longer "unemployed"

[flyingonclippedwings]

12:07 PM on 02/14/2011

Well, of course the new jobless claims are lower. There are less employed people to lose their jobs than there were before. Should be looking at percentage of workforce now versus then that are claiming joblessness.

Plus, most companies are only hiring part-time workers now. So, when the companies throw out those employees, they usually don't qualify for unemployment benefits in order to even file an unemployment claim. They are never counted.

[Peter007]

09:13 AM on 02/14/2011

You can have one person working a job at $100,000/ year or two people sharing the job at $50,000 each.
This is possible.

Many jobs have legislated a minimum wage. No, its not $8.00/ hour but rather $50./hour.

Employment is a state function. Certain special interest at the state level have enacted state laws that have been inhibiting workers from being allowed to work.
Free up the job market by allowing people to work. Get rid of Job killing laws that are on all state books, and lower the wages paid to government employees.

[hrpmap]

11:52 PM on 02/13/2011

Some one here must have missed the headline "3.9 M run out of unemployemnt, Thus the power jobless number.

[Hvacrpro]

08:37 PM on 02/13/2011

Lets see, President Obama , made funds available to the common people not just the wealthy... and the Republican Governors made it a point to deny those funds to get into the Common people's hands who needed it the most.... first they didnt want it... second they misappropriated it, and used it for other means...corporations... once again duping the people, only to later say , where are the jobs... now they have a republican controlled congress, and still have not voted anything for the favor of helping the Common People.... next the Republican Neo Con Corporatist , have not created any legislation to help the Common People... Where are the JOBS? yet the President , they will blame...and deny any role in the current economy , while consuming a trillion themselves , knowingly the Common People who elected them are suffering.

[EH14SCUSA]

03:58 PM on 02/13/2011

People can't get paid for what they can't find, can't do, don't know, then dispare of!
Currently, once people use up their allotted unemployment dollars there's no place to go for assistance, or training... Then, after using up any savings they may have had, people become destitute and emotionally desperate!
In my opinion, America needs an "Unemployed to Employed" Development Panel, made up of recently retired/unemployed Human Resourse/Personnel/Training & Development people (from all work areas and skills), to develop an "attack" plan to get American people back to work!!
These experienced people have more common sense & skills than most so called government professionals and could begin to get this job development program done quickly....!
I should know, I was in Human Resources/Job Development/Job Design & Placement for many years and there are many many more like me...or better! We know how to do this and WE should do this...we've worked for the biggest and the best companies.....the ones who still make MONEY!
At least the concept deserves deserves a try!
"Let's Go, America!"

[Paul Andrews]

07:16 PM on 02/13/2011

@EH14SCUSA I think you are right on the money. OBAMA ran on hope, on yes we can, but he and Biden now just preach DESPAIR, telling us that "These jobs are never coming back" see link
http://sv-se.facebook.com/topic.php?uid=2256460769&topic=34119
we need more positive upbeat can do leaders.
I agree with you completely on all that you said.
I want to help put AMERICANS back to work. see my link
http://youcanmakemoneywithfacebook.blogspot.com/
what do you think ?

[realitytrumpsbull]

03:44 PM on 02/13/2011

I think jobless claims would fall a lot further, and a lot faster, if they dropped federal minimum wage back down to about $5/hr and helped companies advertise jobs. Let's NOT be like Germany, 'k'?

[wdw808]

02:06 AM on 02/14/2011

agreed

[ImmanuelGoldstein]

01:26 PM on 02/14/2011

Baloney. Businesses don't hire on the basis of wages they hire on the basis of demand.
Why should any business hire more people even at lower wages just to stand around looking at each other in empty stores? And in any even who can live on $5 hour? All cutting the minimum wage will do is make more people eligible for government assistance.
What this county needs is a wage INCREASE. We have been producing more and more and more but wages have been stagnant. The only people benefiting are a small percentage at the top.
Put some money in the hands of people who will spend it and you will see this economy grow.
And why NOT be like Germany? Last I looked they were doing better than we are.

[Kenz300]

02:24 PM on 02/13/2011

If you want to get out of a hole the first thing you need to do is stop digging.

Why are we adding more people to the population when we can not take care
of the ones that are already here?

With an unemployment rate of 9% and an under employment rate much higher
it is time to get real about immigration in America.

BOTH legal and illegal immigration need to be reduced.
For too long big business has wanted cheap labor and has ignored the persons
status to be in this country.

H1b visa's that employers use to bring workers into this country need to
be questioned . What do we need to do to fill those jobs with Americans?

Why are we importing workers when so many Americans are unemployed ?
We have college graduates with advanced degrees that can not find jobs.

It is time for American corporations to look at all those jobs they have OUTSOURCED
and bring those jobs home.

It is time for American agriculture to look at innovative ways to bus in workers.
PEOPLE WANT JOBS ! Try putting a bus at a local high school
or a Home Depot parking lot and see how many fill it up.

It is time for American companies like WalMart and Home Depot to start buying
American made goods. Then people will have money to shop.

Without jobs there are no shoppers

[wdw808]

02:08 AM on 02/14/2011

you can not force a company to stop outsourcing

[ImmanuelGoldstein]

01:28 PM on 02/14/2011

Of course you can. Its called TARIFFS. Every industrial economy including our own developed by protecting its local industries and every presently developing economy is doing the same and that includes China.

[Paul Sta]

12:58 PM on 02/13/2011

When is everyone going to realize the unemployment claims, are absurdly corrupted, twisted data, does not include people who ran out of benefits , people who left the work force, and people who took jobs out of desperation at 50 cents of their previous pay grade.

Massive foreclosures, higher food and energy prices, rising interest rates, the economy is in the toilet, except for Corp america and Wall Street, but thats what politicians wanted anyway, you can't fix Main Street and Wall Street, the choice was made. We lose.

[flashpants]

12:05 PM on 02/13/2011

Let me get this straight: The President is proposing a 53 Billion plan for high speed rail-but politicians rail [sorry about that] about the cost. The most expensive public works project in history was the "big dig" the tunnels under Boston Harbor that cost 45 Billion. The transit tunnel to New Jersey was cancelled by Gov. Christie because of the cost. Yet, incredibly they spend 5 Billion per month for deployment to Iraq and Afghanistan and it makes the USA no safer. The incompetencie of these educated derelicts is just staggering. Quit flushing money down the toilet and bring the troops home. Afghanistan and Iraq can take care of themselves. When they are ready for democracy, the'll handle it, like Egypt did.

[mashtoe]

02:22 PM on 02/13/2011

If our government starts a rail project you can count on them buying a Chinese made train. They will not invest in America.

[mashtoe]

11:23 AM on 02/13/2011

We are using H-1b work visas and offshoring to gut the middle class. Both parties fully support these anti-worker regulations.

As long as Americans sit on their hands and remain silent on issues like free trade with communist China and H-1b work visas then nothing will change. Wages will continue to fall and jobs will become more difficult to find, and our deficit will continue to grow.

[fortressfountain]

09:25 AM on 02/13/2011

What a corrupt country. We pay billions in foreign aide and military and then we are told to sacrifice our 401ks, social security and pensions.
Now they want a tax on web commerce also?
How come not even one dollar goes to benefit the USA taxpayer?

[hypnotoad72]

10:02 AM on 02/13/2011

And this: http://hubpages.com/hub/HowH1BVisaFRAUDiskillingAmerica

[enviro1]

08:21 AM on 02/13/2011

Manly people are saying the other shoe will fall upon us soon. I know many on this site are progressives, I'm not saying that you are bad for being one, but our government has used that word (both republicans and democrats) to push an agenda that only hurts this country. We are not energy independent, no where close. With the guise of green energy, Obama and company created an energy bill that sent $56 billion to China, India, and South America. If we would keep our tax dollars in our borders, there would be zero unemployment. I am well aware of the dangers of fossil fuel, and I would love to see more alternative fuel, but we need to create new limited drilling and push more nuclear power in the meantime, while we push hard to develop efficient wind, solar, and hydro power. We should also make a bigger push into natural gas...Energy is where it is, but our government is too corrupt and incompetent to do what is right for this country or it's citizens....if they won't do what is right for this country, then we as Americans should simply vote them out of office, but we must stay engaged and informed. By developing all of these foreign lands, we have raped and pillaged our country and it's economy. Recovery will be very difficult until we make a change at the core.

[democrats for life]

02:04 AM on 02/13/2011

"treading water"--give me a break! it takes 150,000 jobs per month to keep up with population growth! more like going underwater!

[Plan B Economics]

02:10 AM on 02/13/2011

And there's a fundamental change in the work force. People are giving up, losing skills and downsizing their careers.

Check these big 3 charts: http://www.planbeconomics.com/2011/02/09/3-charts-the-scary-unemployment-picture/

[Paul Andrews]

09:48 AM on 02/13/2011

@Democrats for life yes Mexico still has lots of people that are looking for work

[democrats for life]

01:50 PM on 02/13/2011

i'm not moving out of the country for work, if you have the moving expenses, maybe