Thursday, October 16, 2014

U.S. Jobless Claims Lowest In 14 Years

U.S. Civilian labor force participation rate over 16.  Source: U.S. Bureau of Labor Statistics

According to the U.S. Department of Labor, the advance figure for seasonally adjusted initial jobless claims was 264,000 in the week ending October 11, a decrease of 23,000 from the previous week's unrevised level of 287,000,

This is the lowest level for initial claims since April 15, 2000 when it was 259,000.  The 4-week moving average was 283,500, a decrease of 4,250 from the previous week's unrevised average of 287,750. This is the lowest level for this average since June 10, 2000 when it was 283,500.

But the lower jobless claims do not necessary mean a healthier job market.  That's because those jobless claims do not count those no longer in the labor force who have given up looking for work, are underemployed, retired early, have gone on disability because their unemployment benefits lapsed, or have gone to college and taken out student loans because they cannot find employment.  

As the above graph shows, the number of Americans actually participating in the labor force has dropped nearly five percentage points since 2000 to the lowest since Jimmy Carter was President in 1977.  When less people are participating in the labor force, the unemployment level and jobless claims drop because the people not participating in the labor are no longer counted as unemployed and looking for work.