New unemployment claims for the week ending on May 14, 2011 fell by 29,000 to total of 409,000. The previous week was adjusted upwards (a continuing trend) by 4,000 claims from 434,000 to 438,000.
The data as presented every week by the Labor Department would have the economy somewhere between free-fall and looking up. This week the number of unemployed is down, last week it was up, and next week it will be down. It looks like a roller coaster ride to me.
Our economy is going to have to add about 1.5 million jobs (non-seasonally adjusted) between now and July just to keep on track with historical job growth. Last year there was a huge job boost during the Spring from the census; this year there is $4 gasoline and near 10% grocery inflation.
Even though this week's unemployment claims numbers were a bit better than the last few weeks, the trend over the last 6-8 weeks does not bode well. Not only does it not look like this will be the "Summer of Recovery", but we may very well go backwards on employment.
If you happen to be unemployed or underemployed, these numbers will probably offer little solace, and they shouldn't. The employment picture is pretty anemic, we keep rolling forward, but we have some significant overhangs in the economy.
Significant overhangs in the economy:
1. Trade imbalances - Unsustainable bleed.
2. High unemployment - threatens to become more recalcitrant at current levels.
3. Government immobility - the system looks broken, politicians seem unable to cope with complex issues.
4. Large government liability into the future - Unsustainable, how long till we get it?
5. Government debt - too high.
6. Globalization regulatory inequities - again the system is left in a overly complex and easily subverted state, luring the clever and ambitious to forfeit their souls.
7. America is divided.
Without a doubt, the single biggest event that could lift people's confidence, and help clear the fog of uncertainty that is contributing to it, would be a change of the administration currently occupying the White House.
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