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The first full week of October was a good one for the labor market, according to the latest report from the Employment and Training Administration. The number of applications for unemployment insurance dropped 30,000 from a revised figure of 369,000 from the previous week to 339,000 in the week ending October 6.
Three weeks ago, initial jobless claims plummeted to a two-month low. Last week, they fell to a four and a half year low. Such a dramatic decline in the pace of layoffs is welcomed news for many who are looking for consistent figures that show notable improvement in the labor market.
The 4-week moving average for the week ending October 6, considered to be a less volatile number, also decreased by 11,500 from the previous week to 364,000. The advance number for insured unemployment during the week ending September 29 also declined, but the insured unemployment rate remained unchanged at 2.6 percent, which has remained consistent for several weeks.
While improvement in the layoffs side is good news, job creation has been less than stellar. Americans are witnessing consecutive months of job growth, but it has been modest growth at best and hasn’t kept up with population growth. The unemployment rate, which fell to an astonishing 7.8 percent, dropped 0.3 percent after an increase of only 114,000 jobs. This has raised some eyebrows.
The unemployment rate can often be misleading. There are a number of variables that go into calculating the rate. It doesn’t count “discouraged workers,” which is the reason the rate has been as low as it is. The rate doesn’t count people who are in part-time jobs, but want to be or need to be in full-time jobs. It is best to look specifically at net job growth, total employment, the pace of layoffs, and actual unemployment.
US Labor Department officials confirmed that the number of initial jobless claims was as low as it was because California didn’t release all of its initial jobless figures. One official claimed that the incomplete claims data was the result of a “processing issue.”
Considering there are refineries in the state that recently shut down, Americans will likely see the number of first-time unemployment claims rise to some degree in the revised figures for the week ending October 6, as well as the seasonably adjusted figures for the current week.
However, economists want people to know that there is still improvement in the labor market. Voters are looking at the job numbers and the unemployment figures as we get closer to Election Day. It surprised many commentators and political analysts that the debate between Vice President Joe Biden and Rep. Paul Ryan on Thursday night didn’t focus on the economy more extensively.
Americans need to know that there is improvement because there is so much misinformation floating around online and in social media. For the sake of gaining political advantage, there are some that would convince consumers that the state of the labor market and the economy is worse than it was when Obama took office, which couldn’t be further from the truth.
The biggest problem is the extreme polarization that has a firm grip on our nation’s capital. America is facing an impending fiscal cliff which could drive up unemployment and plunge the country back into recession unless elected officials in Washington can find a way to cooperate. It is likely that an eleventh-hour compromise will be reached, but many voters feel disenchanted by hyper-partisanship on Capitol Hill.