Economy Watch: Unemployment Claims Dive
- Jan 20, 2012
The U.S. Department of Labor reported on Thursday that for the week ending January 14th, initial unemployment claims totaled 352,000, a sharp decrease of 50,000 from the previous week’s revised figure of 402,000. The less volatile four-week moving average was in fact less volatile, totaling 379,000, which was a decrease of 3,500 from the previous week’s revised average of 382,500.
The drop of 50,000 applicants—a seasonally adjusted number—was the largest drop in six years, while the weekly number itself was the lowest since April 2008, before the panic that precipitated loss of 8.7 million jobs in the United States. As for the four-week average, only once in the last three years has the figure been lower.
During all of 2011, the economy created 1.6 million jobs, up from 940,000 during 2010. According to a recent AP survey, economists are forecasting the creation of 1.9 million jobs in 2012, presumably barring such the untoward and panicky effects of (for example) a war in the Persian Gulf or a disorderly dismantling of the euro.
Home starts drop
The jobs market might be getting some traction, but any improvement there will take a while to help out the housing market. Especially new home starts, which were at an annualized rate of 657,000 in December, down 4.1 percent from November. Mostly the change was attributable to a downward swing in multifamily starts—down 20.4 percent—which tend to yo-yo around as the months pass. On the other hand, total residential starts were 24.9 percent higher last month than during December 2010.
Single-family housing starts for December were up 4.4 percent compared with November, to an annualized rate of 470,000 units. That was the third monthly increase in a row for single-family homes, and the fastest rate since the faux recovery of April 2010.
“[The] report adds to the growing evidence that demand for new, single-family homes is finally starting to firm up in an increasing number of markets nationwide,” Bob Nielsen, chairman of the National Association of Home Builders, noted in a statement. “This emerging trend is allowing builders to put more crews back to work, and could be even stronger if not for the overly tight credit conditions that prevail for both builders and buyers, as well as the continuing foreclosure crisis and the challenges of obtaining accurate appraisal values on new homes.”
CPI flat for December
The Bureau of Labor Statistics reported on Thursday that the U.S. Consumer Price Index didn’t budge in December. Take out food and energy and the increase was only 0.1 percent for the month. The gasoline index dropped for the third month in a row in December, and the household energy index declined as well. On the other hand, the food index rose in December, with the index for food at home turning up after declining last month.
For all of 2011, the CPI was up 3 percent. In 2010, the increase was only 1.5 percent. The index without food and energy also accelerated in 2011, increasing 2.2 percent after its historical low 2010 increase of 0.8 percent. The cost of energy rose 6.6 percent in 2011, which wasn’t quite as much as the 7.7 percent in 2010. Gasoline rose an unpleasant 13.8 percent in 2010, and then increased 9.9 percent in 2011.
Wall Street seemed moderately impressed by the employment numbers on Thursday. The Dow Jones Industrial Average gained 45.03 points, or 0.36 percent, while the S&P 500 was up 0.49 percent and the Nasdaq advanced 0.67 percent.