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Movement in the Right Direction
Some good news this morning, as new unemployment claims beat expectations last week. If you don’t care for the details, at least do me a favor and skip down to read the last two paragraphs of this post.
Here’s the latest…
Jobless claims are reported weekly by the U.S. Department of Labor. We watch these reports closely because they often represent a near real-time indicator of our nation’s job market. There are actually two numbers that are relevant here: “initial claims” and “continued claims.”
When we hear that “X” number of INITIAL claims were filed, that does not mean the total number of people on unemployment grew by that number. This is because while new claims have been filed, other people have been rolling off unemployment during the same time.
To get a better sense of what’s happening, we also need to look at other data including the CONTINUED jobless claims, which tells us how many people renewed their unemployment claim in subsequent weeks following their initial claim.
This means we can get a snapshot of recent job losses by looking at initial claims, and a better overall picture of the job market by looking at continued claims. Obviously, we all want to see downward trends leading to low numbers from both these reports.
A simple analogy is a bathtub. The water coming from the faucet represents new (initial) jobless claims. The water in the tub itself represents the continued claims from those still looking for employment. And the water leaving the drain represents the jobs being restored or created. We want to do everything possible to shut off that faucet and unclog the drain.
Last week, initial jobless claims fell by 249,000, dropping from 1,435,000 the week prior down to 1,186,000 last week. This comes on the heels of a slight uptick in mid-July, but the four-week rolling average is still down slightly.
Meanwhile, continued claims (which lag a week behind) dropped by 844,000. Continued claims also saw a slight uptick in mid-July, but again the four-week rolling average is down as well. Click here to see this week’s full report from the Dept. of Labor.
Bottom line: this is movement in the right direction, but we still have a ways to go.
It’s very impersonal and cold to talk about unemployment numbers on a macro level like this. I hate it, because each one of these unemployment claims was filed by a real person, with a real family who is likely facing significant hardship because of this pandemic. If you know someone in this situation, *please* consider reaching out to them to offer your support and encouragement.
And if you or someone you know is having any problems with unemployment insurance, please pick up the phone and call my Rock Hill office at (803) 327-1114. We'll be happy to work with you to figure out what's going on.
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