This morning's Labor Department statistics continue the slowly building good news for workers and the economy.
In the week ending March 20, the advance figure for seasonally adjusted initial claims was 442,000, a decrease of 14,000 from the previous week's revised figure of 456,000. The 4-week moving average was 453,750, a decrease of 11,000 from the previous week's revised average of 464,750.
I should have pointed out weeks ago that it's unwise to take these figures as perfectly accurate. There is always a level of error, though small. Interpreting such statistics is much like interpreting psychological/personality tests. Use the statistic as a pointer towards what is happening. Neither the psychological statistics nor the labor department statistics are perfectly accurate.
I write this because many people seem to need complete certainty about life, job, numbers and statistics. Maturity pooh-poohs such expectations.
Once again, here's Mark Zandi's interpretation of the initial claims figures: Only when claims head down to 400,000 will the economy be creating enough jobs to maintain stable unemployment. Closer to 350,000 will lower the unemployment rate and mean that the recovery is evolving into an expansion. When we get to initial weekly unemployment claims of 300,000, boom times are back.
A week or two ago, using input from the national Human Resource organization, I commented that their survey of HR people found that a majority of manufacturing and service companies would be hiring during the second half of the year. The report said that although firms were still terminating employees, they were also hiring for strategic reasons. One of my cronies asked what that means. I noted that in a tight financial situation, there are a lot of reasons for getting terminated, and not just poor performance. Often it's for strategic reasons or new organizatonal alignments.
This is also a place to refer you to an outstanding profile of Treasury Secretary Timothy Geithner in the April issue of the Atlantic. I've found myself defending him and his work on numerous occasions. He's one of the few that actually understands macro finance, and he's quite willing to challenge those that (naively) think you could have treated the financial industry differently. Geithner's background is exceptionally unusual and for my money, a godsend at this time. As you may know he's been ruthlessly pilloried by both conservatives and liberals and most anyone else. What he's doing and recommending is a major restructuring of finance and the financial industry, of economic practices, and of economic theory. The recession and his task of restructuring is in many ways a rejection of Milton Friedman's theories which had taken over the American political and financial system. You can learn about that issue and its rejection by Richard Posner, a leading member of the Chicago School (Friedman, et al), in a recent Businessweek article here: Slapped by the Invisible Hand. I notice that everybody and his uncle on the web are recommending the article. What Posner concludes is that we cannot trust financiers to put the common good ahead of profit and so government must step in to limit the risks bankers take and occasionally repair the damage they inflict.
Oh, I forgot, if you want more detail on who loses their job, here's a blog I wrote sometime ago: Understanding who gets laid off.