It’s well-known that job creation has been pretty mediocre, basically ever since the recession ended.
Every time we get a couple months in a row, and some optimism that a new, accelerated pace of growth is here, the numbers inevitably disappoint.
But on the flipside, the pace of layoffs is stunningly low.
Here’s a look at weekly initial jobless claims vs. the total number of people who are employed.
With the exception of recent bubble peaks, we’re basically at the best levels in decades.
Scott Sumner at The Money Illusion expresses his amazement and confusion at these numbers:
I’m not going to redraw the graph, but with today’s numbers (308,000 on the 4 week average) we have fallen below the 0.1% level, meaning that fewer than 1/1000ths of Americans now file for unemployment comp each week. That’s not just boom conditions, it’s peak of boom conditions. The only other times this occurred since 1969 (when unemployment was 3.5%) were just a few weeks at the peak of the 2000 tech boom and a few weeks at the peak of the 2006 housing boom. In other words, the puzzle is now even greater than 6 weeks ago, as the unemployment rate is still at recession levels (7.3%.) Something very weird is going on in the labour markets.
My hunch is that these new numbers portend further declines in the unemployment rate in the months ahead. Which is also a puzzle given that RGDP growth is about 2% in recent years.
As Scott puts it, something “weird” is going on.
Business Insider Emails & Alerts
Site highlights each day to your inbox.