The Labor Department reported a very minor uptick in the number of jobless claims last month, illustrated in the graph above. As you can see the number is pretty stable and close to pre-pandemic numbers. At the Wall Street Journal Austen Hufford reports:
Initial jobless claims, a proxy for layoffs, rose by 4,000 to a seasonally adjusted 230,000 last week, the Labor Department said Thursday. That was near the 2019 weekly average of around 218,000 when the labor market was also robust.
Continuing claims, which reflect the number of people seeking ongoing unemployment benefits, rose to their highest level since late February, though they also remain historically low. Continuing claims increased by 62,000 to 1.67 million in the week ended Nov. 26.
Jesse Wheeler, an economic analyst at Morning Consult, said the slow rise in continuing unemployment claims is an indication workers are remaining on unemployment insurance for longer instead of immediately finding a new position.
“People who are losing their jobs are finding it more difficult to find a new job,†he said.
The latest report comes as the labor market remains tight, with continued job growth and low unemployment. Still, several major companies have laid off workers or stopped hiring in recent months.
So, unemployment is pretty stable, the job market is robust, gas prices are falling, and the rate of inflation is decreasing.
Here’s my question. Why doesn’t Joe Biden get the credit he deserves? Americans continue to have negative views of Biden and the economy. If you think it’s bad media coverage, please prove it. I don’t see it. That doesn’t mean individual stories or even an individual network—it means the preponderance of coverage.
I think it’s because when they go to the grocery store or gas station Americans see higher prices; they don’t look at the inflation rate—that’s a first derivative phenomenon. The stories they’re hearing are of layoffs by some of the biggest employers in the country. Changes in the rate of inflation are a second derivative phenomenon. Not something to which people tend to react.
And, as has been said (at least by men’s clothing manufacturers), you never get a second chance to make a first impression.
He ain’t photogenic, he’s dull, old, bumbling, and feathers his own nest quite adequately.
Translation: he’s not a good spokesman for himself. Neither are the proxies he’s picked.
The rate of inflation is decreasing, it’s not back to normal. The decrease is small enough that people aren’t seeing the effects yet. And people are still worried about a recession – that is something the press and many people are talking about.
It’s not just that. “Rate of inflation decreasing” does not translate to “prices going down”. Prices are continuing to rise, just more slowly.
On inflation, the sourness should be understand in a wider context.
First, as noted, consumers care about both absolute level and the first derivative; and so far the administration’s success is bringing down the second derivative. When inflation is measured at 7% a year vs a Federal Reserve goal of 2% average or 2% peak (previous goal) its still far too high.
The other note is while nominal price increases are slowing down, the financed price of everything is going up quickly. For example used car prices are down 10% year over year; but with interest rates going from 1% to 5%, the actual car payment is more expensive than ever.
Given how much of consumption is financed, consumers aren’t seeing much relief on the inflation front yet.
And an analogy. The medicine to bring down inflation with aggressive rate hikes is akin to treating cancer with chemotherapy. One is happy they lived but I doubt many people will regard with joy the chemotherapy needed.