The unemployment roller coaster went thundering back up the tracks last month, as the Labor Department released its numbers for the week ending January 8. Initial unemployment claims were back up to 445,000, which is up 35,000 from the previous week. The four-week moving average, considered a more stable measure of employment activity, was pulled up to a dismal 416,000 new claims.
Major media outlets describe these numbers as “unexpected,” which is only true if you thought the good numbers from the past few weeks represented anything other than Christmas-season temporary hires. Remember all those big stories in November about how a record-breaking season of phenomenal retail sales was in store? It looks like many retail outlets responded to those stories by staffing and stocking up.
How did that Christmas season work out for retailers, anyway? Well, it was “unexpectedly” disappointing, despite a surge of online sales. I would think a move toward online retail sales wouldn’t be good for the job market. Brick-and-mortar stores are much more labor-intensive, and their hiring is distributed across many communities. Online retailers just need a few centralized warehouses and data processing facilities.
CNN offers some curious analysis of the new unemployment figures from Peter Maris of the Resource Financial Group, who says, “Looking at the weekly numbers is like looking at the stock market on a day-to-day basis, you can expect a few ups and downs without a real reason, but the trend is still that jobless claims are stabilizing and the jobs picture is gradually getting better.” So unemployment is flight through turbulent weather, bouncing up and down without a real reason, but the situation is “stabilizing?” Let’s get through a few months without any “unexpected” bad news before we start talking about stability.
Maris also said “jobs are being posted, but many employers just don’t seem to be filling the jobs.” What does that have to do with a surge in new unemployment claims? Hiring is poor at the moment too, but that’s an entirely different topic from a vast wave of people losing the jobs they already held.
December began with a job bubble caused by media hype over strong retail sales that didn’t materialize. The Obama economy is settling back to business as usual in January. The situation will only improve if the new Republican House improves it with sane spending policies, and long-term reductions in the tax and regulatory burden on business.