Don’t cheer too soon – Jobless claims rise again 2025
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Don’t cheer too soon – Jobless claims rise again 2025
There were an estimated 242,000 jobless claims filed last week, according to seasonally adjusted data released Thursday by the Department of Labor. That’s an increase of 22,000 from the prior week’s tally and a figure that landed well above economists’ expectations for 220,000 claims.
It’s the largest weekly spike in claims in more than four months and the weekly claims — a proxy for layoffs — are at their highest level since early December, Labor Department data shows.
My thoughts
I think that unemployment will increase as a result of Govt. layoffs.
I’m not worried about a recession at this time
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First-time filings for unemployment insurance jumped higher last week in a sign of continuing strife for the labor market. CNBC’s Rick Santelli and Steve Liesman break down the jobless claim numbers as well as some other economic data.
Filed Under: I’m old enough to remember when we created jobs
Updated: Boston real estate 2021
Original Boston Real Estate Blog Post
I read a New York Times article recently regarding unemployment titled: Don’t Cheer Too Soon. Keep an Eye on the Core Jobless Rate. The piece suggests we should look at unemployment numbers somewhat differently. The author of the article, Jed Kolko, is a well-respected economist who is currently the Chief Economist at Indeed, the world’s largest online job site. Previously, he was Chief Economist and VP of Analytics at Trulia, the online real estate site.
Should temporary unemployed be counted in the unemployment number?
According to Jed Kolko:
“the coronavirus pandemic has broken most economic charts and models, and all the numbers we regularly watch need a closer look.”
He goes on to explain that the decline in the unemployment number reported by the Bureau of Labor Statistics (BLS) earlier this month was driven by a drop in temporary layoffs. If we strip those out, we’re left with what Kolko calls the core unemployment rate. Many economists have struggled with how to deal with the vast number of temporary layoffs, as a complete shutdown of the economy has never happened before. As the article states, in the last unemployment report:
“73 percent of all unemployed people said they were temporarily unemployed, which means they had a return-to-work date or they expected to return to work in six months. Before the pandemic, temporary unemployment was never more than one-quarter of total unemployment.”
The core unemployment rate handles this issue and also deals with another concern economists have discussed for years: the exclusion of the marginally attached. These are people who are available and want to work, but count as out of the labor force rather than unemployed because they haven’t searched for work in the past four weeks.
Unemployment core rate does three things:
- Takes out temporary unemployment
- Retains the rest of the standard unemployment definition: permanent job losers, job leavers, and people returning to or entering the labor force
- Adds in the marginally attached
Removing the temporarily unemployed makes sense according to the article:
“Initial pandemic relief efforts focused on money for people to manage a temporary loss of income and funds to keep businesses afloat until they could bring their workers back. The hope and the goal is for the temporarily unemployed to return to their old jobs, rather than have them lose their jobs and have to search for new ones when jobs have become scarcer.”
The Bad News and the Good News
Clearly, the adjustments Kolko makes dramatically impact the way we look at unemployment. The bad news is, using his core rate, there was an increase in unemployment from April to May. The conventional rate reported by the BLS showed a decrease in unemployment.
The good news is that the core rate compares more favorably to the last recession in 2008. Here’s the breakdown:
Unemployment rate and real estate
Boston Real Estate and the Bottom Line
The unemployment rate is a key indicator of how the economy is doing. Heading into a highly contested election this November, the BLS report releasing next week will be scrutinized like no other by members on both sides of the aisle. Mr. Kolko’s take is just one additional way to evaluate how unemployment is impacting American families.
