Thursday, January 19, 2012

Good News, For a Change

It's beginning to look like we might be turning the economy around.

From Steve Benen at Political Animal:
The general trend on initial unemployment claims over the last two months has been largely encouraging, though there have been setbacks. Last week, for example, was a step in the wrong direction.  
This week’s report, however, was a very pleasant surprise. Initial claims not only dropped sharply, they fell to a level unseen in nearly four years. 
The number of Americans who filed requests for jobless benefits sank by 52,000 last week to 352,000, the lowest level since April 2008, the U.S. Labor Department said Thursday. Claims from two weeks ago were revised up to 402,000 from 399,000. Economists surveyed by MarketWatch had projected claims would fall to a seasonally adjusted 375,000 in the week ended Jan. 14. The average of new claims over the past four weeks, meanwhile, dropped by a much smaller 3,500 to 379,000.
In terms of metrics, keep in mind, when these jobless claims fall below the 400,000 threshold, it’s considered evidence of an improving jobs landscape. When the number drops below 370,000, it suggests jobs are actually being created rather quickly.
Steve also provides this chart tracking initial unemployment claims, and that arrow around 2009 is when Obama's stimulus package began spending money.

The Republicans have been slamming Obama's job creation record lately -- Romney has claimed that Obama has lost 2 million jobs, and Gingrich has been calling him a "food stamp president". (Bonus fun fact: Bush II had more people go on food stamps, about a half million more.)

But this graph shows quite clearly that Obama stemmed a horrific rise in initial unemployment claims, and has been -- slowly -- adding jobs ever since.

Another way to look at this would be to consider total (non-farm) employment, as Krugman did with this chart from FRED (the St. Louis Fed's wonderful collection of economic data. Jobs continue to tank once Obama took office, but once his stimulus plan was passed and dollars started moving out the door, things turned around.

Now, if the stimulus would have been bigger, the economy would have bounced back more quickly (and we still have quite a ways to go). But it's pretty hard to argue that Obama didn't stop the economic downturn and put us back on the right path.

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