Thursday, October 13, 2011
Jobless claims - no surprises here
What is so surprising about the jobless claims numbers is that they are not that surprising and should be viewed as following an expected pattern set by the last recession.The charts above show initial jobless claims and continuing claims since 2000. What has changed from most post-WWII business cycles is that the claims numbers are very sticky and take a long-time to decline. Initial claims are not much different from the the 2001 recovery after the initial reversal took place in 2009. Continuing claims are similar to the 2001-2002 period.
Changes in the economy with more part-time work, less manufacturing, and changing skill requirements to name just a few, make it harder to bring down longer-term unemployment. It was a mistake to think that we would have gotten more success. One mistake was to believe the adage that a steep decline will lead to a steep recovery.