JOBLESS CLAIMS AT SEVEN-MONTH LOW – AT 8:56 A.M. ET: The devil is, as always, in the details, and the news really isn't very spectacular, but at least the trend is in the right direction. However, it's a tiny trend. From Bloomberg:
Fewer Americans than forecast filed first-time claims for unemployment insurance payments last week, an indication the labor market may be gaining traction.
Applications for jobless benefits decreased 5,000 in the week ended Nov. 12 to 388,000, the lowest level since April, Labor Department figures showed today in Washington. Economists forecast 395,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls fell to a three-year low.
As firings diminish, U.S. companies may add to payrolls at a faster pace as demand picks up. Sales that grew more than expected in October set the stage for higher levels of output, which could require more employees.
“Layoffs have eased, which is a great sign,” said Omair Sharif, an economist at RBS Securities Inc. in Stamford, Connecticut. “The other side of the equation, however, is that firms are still very hesitant to hire. You’re getting a very gradual improvement in the labor market.”
COMMENT: The fact is that 400,000 applications is considered very bad news, and 388,000 isn't much lower. The fact also is that actual job creation is still lagging badly, and many lost jobs will probably never come back.
However, Obama can use these statistics to reassure on-the-fence voters that things are actually improving. The media will help him. If the number of jobless claims suddenly starts to drop steeply, it could mean Obama's reelection simply because of the psychological impact.
November 17, 2011