Thursday, April 30, 2009
New Jobless Claims Drop
It's fascinating to me how the media covers economic news. It was reported today that 631K new jobless claims were filed this month. At some point the rate of new jobless claims has to drop. 631K a month translates to almost 8M new claims a year. That simply is not a sustainable rate unless this becomes a massive catastrophe. A year of that, assuming flat or no new job creation to offset it, essentially increases the total number receiving jobless benefits from 6.3M to over 14M. If it gets to that point, we're in 1930's depression territory. If we have several more months of even "just" 500K new jobless claims a month were in trouble. The key question is when, after the numbers have stabilized at some point, will we start to see positive job growth and a rise in employment? Ultimately, that's what matters.