The triumphant announcement in today’s news:
“The Labor Department said the total unemployment insurance rolls fell by 148,000 to 6.69 million in the week ending June 6, the largest drop in more than seven years. The decline is a sign that layoffs are easing.”
Why does this indicate that layoffs are easing??
Later in the same article they also report that initial jobless claims rose unexpectedly to 608,000. Still further on, they explain that the typical state unemployment benefits extend for 26 weeks, and that the last time the unemployment rolls shrank was early January. Well, it sure seems to me that the drop was due primarily to the expiration of benefits for those poor saps laid off in January (26 weeks ago), rather than to an easing in layoffs or bottoming of the recession.
Were we to extend this logic further into the future, the unemployment rolls may eventually drop to 0, that’s the good news. The bad news, though, is that the percent unemployed may be 100%!