The NYT article on weekly unemployment insurance (UI) claims carried the surprising headline: "first-time U.S. jobless claims fall again." The reason the headline is surprising is that claims rose the prior week, from 561,000 to 576,000, a number that was revised up to 580,000 in the new report. So, claims did not fall again. This article makes the point that new UI claims, which have averaged 566,000 over the last four weeks, are down sharply from the peaks hit in April. However, it is worth noting that these are still extraordinarily high levels of claims. In a healthy economy, we should expect to see weekly claims in the low 300s. Also, the current rate of claims can be consistent with a very rapid pace of job loss. In November of 2008, when the economy lost 597,000 jobs, weekly UI claims averaged 520,000. In December, when the economy lost 681,000 jobs, UI claims averaged just over 550,000. It is obviously better to see UI claims averaging 566,000 than the 650,000 weekly average that we saw earlier this year, but in other times, weekly claims at this level would be really really bad news.
--Dean Baker
