A Washington Post article discussed predictions around the December employment report that will be released on Friday. It noted predictions that employment will actually be shown as increasing in this report, noting several pieces of relatively good news, including the fact that the number of weekly unemployment claims had fallen to their lowest level since August of 2008. It is worth noting that the economy lost 175,000 jobs in August of 2008. In fact, it has never added jobs in a month where weekly unemployment insurance (UI) claims averaged more than 400,000. The current four week average is close to 450,000. There is also reason to believe that UI claims will fall relative to the number of layoffs as a recession continues, since many of the people who are losing their jobs are likely to have worked too little in the prior year to qualify for benefits. [Correction: I was being sloppy again -- very bad practice. The economy began to add jobs in 1992 when UI claims were still slightly above 400k a week. The same was true in 1983. So the relationship is not as solid I as I said above. It is true that the economy only began adding jobs in 2003 after weekly claims fell below 400k. Thanks to Eric Freeman for pointing this out.]
--Dean Baker