US weekly jobless claims fall more than expected:
In mid August, markets dropped substantially and remained unsteady the following day according to a journalist for The Washington Post. People are beginning to have concerns that a recession is looming due to increased layoffs and lower productivity. The article that I attached to this post is clearly showing that employers and businesses are continuing to hire. Despite the manufacturing slowdown and concerns about a recession, the data shown in the article suggests that the labor market is holding strong.
The article states that the number of Americans filing applications for unemployment benefits has fallen the week of the 12th. The Labor Department said on August 15th the claims for state unemployment benefits dropped 12,000 to approximately 209,000 by August 17th. They were not expecting such a substantial drop in claims. It was projected to drop to only 216,000. This suggests that the labor market is holding steady against the concerns about a possible recession and the manufacturing slowdown.
The Labor Department's four-week average for new unemployment benefits claims was lower than the corresponding weeks in July, which is a positive sign for employment during the month of August.
The graph in the article shows the initial jobless claims from 2008 to 2018. After the 2008 recession, we see a spike in initial jobless claims to almost 700,000 from about 350,000. It overall shows the decrease in jobless claims since 2008- going from 350,000 to just above 200,000.
Within the chart, initial jobless claims have been on a consistent downward trend since the years following 2008. With talks of an impending recession in the near future, it will be interesting to see if these jobless claims spike back up as a result.
ReplyDeleteWith the recent inverted yield curve (and the fear of a looming recession), it is reasonable to assume that businesses and the job market will become more cautious about the economy and the labor market. This new cautiousness would potentially lead to the reversal of these economic trends. Because of this, it is likely that we will see a decrease in economic investment and an increase in applications for unemployment benefits.
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