Scott Sumner notes the strange disconnect between the new claims for unemployment and the unemployment rate:
"With today’s numbers (308,000 on the 4 week average)...fewer than 1/1000ths of Americans now file for unemployment comp each week. That’s not just boom conditions, it’s peak of boom conditions. The only other times this occurred since 1969 (when unemployment was 3.5%) were just a few weeks at the peak of the 2000 tech boom and a few weeks at the peak of the 2006 housing boom. In other words, the puzzle is now even greater than 6 weeks ago, as the unemployment rate is still at recession levels (7.3%.) Something very weird is going on in the labor markets."
While admitting that he doesn't know what is causing this disconnect between the two unemployment indices, Sumner speculates that the ultra-low new claims rate will be followed by a decline in the unemployment rate. But this would be an odd, if welcome, development because real growth is still at a pokey 2% annual rate, barely enough to keep the unemployment rate from rising.
So we're left with two puzzles: how can new claims for unemployment be at a peak-of-the-boom level while the unemployment rate remains at the moderate recession level? And how can we expect the unemployment rate to fall further when real growth is so slow? One thing I can say with some confidence is that these puzzles are not the result of poor data. While growth rates tend to be revised (up or down) after their initial estimates, unemployment figures are among the most robust of government statistics.
The answer to this one is simple. Once people use up their 99 weeks of unemployment they can't file for unemployment again, at least not until they find another job, which few of them ever do. So they go on Social Security Disability, which is at an all time high. They remain on Social Security Disability until age 65, so they'll never access unemployment again.
BIRTH DEATH model, used to guestimate jobs created by new business which the department guesses at but cannot prove exist. Generally inflates until the numbers are quietly revised downward 1 or 2 months later. 90 million Americans NOT in the labor force. Growth in economy, even if 2 percent, is pathetic. Obamacare is wiping jobs and hours off the map. So, this is a good thing?????