Diane Swonk, Chief Economist
Feb. 4, 2010 – 7:40 a.m. CT
Employment Still Elusive
Unemployment claims edged up to 480,000 in the most recent week, a slight deterioration from the previous week. Unemployment claims need to dip into the 350,000 range consistently before we see any major improvement in payroll employment.
This, coupled with the ADP report on employment earlier in the week, suggests that firing continued to outpace hiring in January. Nonetheless, the pace of job losses has clearly abated and we are on the verge of a tipping point. The temporary surge in hiring for the 2010 Census virtually ensures it.
However, any gains in employment that we do see in February and March are likely to be muted and not enough to contain unemployment. Indeed, the ranks of discouraged workers have risen quite substantially over the last year. This suggests that unemployment will continue to rise, as those workers throw their hats back into ring once we do see a pickup in hiring.
It will be a rocky year for those still looking for work, and an even tougher year for incumbents trying to get re-elected. Some unemployment in Washington, D.C. may be warranted given the cowardice they have shown in recent weeks. The attacks on the Fed and its independence are particularly disturbing.
P.S. Fed Chairman Ben Bernanke was quietly sworn back into office yesterday.
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