The weekly report of new unemployment claims was released at 8:30 and it is hard to see anything but gloom in the numbers. For the record, the Labor Department says that there were 424,000 new claims last week. This is 10,000 higher than the week before. The key, however, is not the specific number. Instead, the important point here is that for the last five weeks the number has been higher than 400,000. Economists disagree whether the number has to get to lower than 375,000 or 400,000 for there to be net job growth in the economy. Under either assumption, however, there is unlikely to be any net growth in the number of jobs in the economy. That is bad news when it continues for as long as five weeks in a row.
Of course, it is not hard to see why job growth is stalling. Growth in the economy was under 2% in the first quarter, a result that the government just reaffirmed today. At that level of growth, there just are not enough jobs created to bring down unemployment. Indeed, all of these numbers indicate that when the May unemployment level is released, logically it should show a rise over last month.
It will be hard for the media to spin this as good news. We keep hearing how things are getting better. To a great extent, however, these stories should appear under the headline "Pay No Attention To the Man behind the Curtain!!"
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