Another indication that the jobs picture may be getting ready to improve came Thursday with the Labor Department’s announcement that weekly unemployment benefit applications dropped by 5,000 to a seasonally adjusted 388,000. It was the lowest level since early April, and the fourth decline in five weeks. The four-week average dropped below 400,000 for the first time in seven months, to 396,750.
The numbers suggest an easing in layoffs, which could be setting the stage for an increase in hiring. Applications need a consistent drop below 375,000 for sustained job growth. The last time that number was seen was in February.
In addition, the number of people receiving benefits fell to the lowest level since September of 2008, dropping 57,000 to 3.6 million, although many people are believed to have simply used up their benefits. Moreover, the figure doesn’t include the 3 million people receiving extended benefits from emergency programs. This, coupled with the fact that only 80,000 jobs were added in October, has clouded what is seen as a general improvement, with the unemployment rate recently dropping to 9%.
It’s all a sign of an economy that is turning, but at a sluggish rate. Manufacturing is picking up, and retail sales are growing, but companies are doing more with less, and many employees are still on the sideline. Nevertheless, growth, however slow now, is expected by many to improve over the next several months, though nobody is expecting things to move quickly. The economy would have to grow at twice the current rate to significantly improve the job picture, and consumers can only keep spending for so long without improved employment income.
On top of all this is the continuing debt crisis in Europe and the U.S., problems that everyone agrees will require substantial growth to address.
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