Unemployment update: best number in months
TEXT OF INTERVIEW
JEREMY HOBSON: And now, for more on our top story — we turn to Diane Swonk, chief economist at Mesero Financial in Chicago.
Good morning.
DIANE SWONK: Good morning.
HOBSON: Well, first of all, this figure from the labor department. The number of new people filing for unemployment benefits dropped by about 21,000 last week to 434,000. That is the lowest level since July. Sounds like pretty great news — is it?
SWONK: Well, certainly when you lower the bar it’s easy to exceed it. And the bar has been lowered quite a bit. It is a good news and welcome news that we’re seeing a downward trend in unemployment claims. This is a highly volatile statistic though. And in fact last week’s claims we were revised up. Our moving average on claims is still over 450,000 which is still more consistent with an economy with the unemployment rate rising, rather than falling.
HOBSON: Obviously the Fed is keeping a close eye on this number and labor market in general. We heard yesterday about how much new money they might pump into the economy after their meeting next week. Do items like today’s jobless claims number change the Fed’s plans?
SWONK: Well they certainly don’t change the commitment of Fed Chairman Ben Bernanke to try to do more for an economy that is still very fragile in its recovery. It’s almost 16 months into the recovery now, so it doesn’t change his commitment, but it is one of the factors along with the naysayers with in the Fed, that are actually trying to stop the Fed from moving forward, and so it will mitigate the size of anything they do initially. They’ve already said it looks like it will be incremental change in their balance sheet and they may do it for a long time, which could, you know, add up to be a lot. But initially, it’s not this number but in general the backlash to the Fed moving more within the Fed will keep them from going very aggressively at their start next week.
HOBSON: Okay, Diane Swonk, Chief Economist at Mesero Financial, thanks so much.
SWONK: Thank you.
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