This morning’s unemployment report is being viewed as a positive data point with the number of initial claims dropping by 10,000. However, with the total adjusted number checking in at 453,000, a 10k drop is not really a significant decline. Analysts had been expecting the number to drop more and hit 450,000 for the month.
Unemployment has been an important issue, and one that has been difficult to tackle. Despite many stimulus projects aimed at improving the unemployment picture, workers are still finding it challenging to find jobs. This from a Reuters report on the data:
Although the economy has now grown for three straight quarters following the worst downturn since the 1930s and the recovery is broadening, stubbornly high unemployment is eroding President Barack Obama’s popularity… While other indicators support views the labor market recovery is firming, claims for jobless benefits remain above levels usually associated with sustainable employment growth.
While the jobless report is helpful in determining the state of employment in the US, most eyes will be turned to the more popular Employment Report which will be released tomorrow. The expectation is for non-farm payrolls to have increased 513,000 in May – much of which is due to the census hiring.
Employment is an important part of any economic recovery because it directly affects the well being and sustainability of the population. While the US could experience nominal GDP growth as an eventual product of stimulus spending, without a sustained resurgence of private jobs, the recovery will quickly run into substantial challenges.