Thursday, August 11, 2011

Jobs Claims Decrease Is Nothing To Cheer About

August 11, 2011 - The U.S. Department of Labor reported today that unemployment benefits claims "fell" for the week ending August 6. That's good news, right?  I don't think so, because the amount by which the numbers fell were so small that they are statistically insignificant. In fact, the number averages to a mere 140 fewer claims per each of the 50 states.

"Claims for U.S. unemployment benefits unexpectedly dropped last week to a four-month low," a Bloomberg report noted today, "signaling the job market is being hampered by a lack of hiring rather than more firings. The number of applications for unemployment insurance payments fell 7,000 in the week ended Aug. 6 to 395,000, the fewest since early April..."  (My emphasis added.)

That 7,000 number is statistically insignificant. It's not enough to matter. 140 fewer claims per state is pitiful. The more significant number is the 395,000 new applications. Repeat: New applications. That averages to 7,900 per state. In other words, more than a third of a million new unemployment benefits claims were made in the week ending August 6.

Bloomberg's report also noted that the Labor Department’s jobless claims report also said that "the number of people continuing to collect benefits dropped by 60,000 in the week ended July 30 to 3.69 million."

That drop, however, includes a lot of people whose claims have simply expired, and people who have taken jobs that are not as good as those they previously held but now disqualify them for continuing benefits.