20101028 unemployment paperwork 35
NEW YORK - OCTOBER 08: Dale Chandler's unemployment insurance notice sits on a table on October 8, 2010 in the Brooklyn borough of New York City. The U.S. government reported today that the U.S. economy continued to shed jobs for the month of September. The unemployment rate remained unchanged at 9.6 percent in August - 


JEREMY HOBSON: Now to this morning's news from the Labor Department. The number of new applications for jobless benefits dropped to 388,000 last week. That's the lowest level since July of 2008.

For reaction, let's bring in Diane Swonk, chief economist at Mesirow Financial. She's with us from Michigan. Good morning, Diane.

DIANE SWONK: Good morning.

HOBSON: So what do you make of this number from the labor department?

SWONK: Certainly the trend is the right direction -- it's good news. But we do know this time of the year a lot of seasonal distortions can suppress the numbers, so I hate to pop any champagne corks yet because we're still a long way from seeing labor markets fully heal, and I think we're going to see some distortions in the next several weeks as well. Everything from closing around Christmas to the shuttered government offices that we saw during those winder snows in the East coast will again suppress unemployment claims because people just couldn't get in to apply.

HOBSON: So maybe not as great as it sounds. Diane, so much has happened in the economy this year. As we close out this year, if you can put it in context for us. How will you remember 2010?

SWONK: Unfortunately, being in Michigan I'm always reminded of reality and I was recently in a Wal-Mart in Michigan here and looking in the shampoo aisle helping a woman find some shampoo and as I pulled down a moderately priced brand for fine hair, because her worrying was having her hair fall out of her head, she looked at me and she said I can't afford that. And it was less I would pay for a cup of coffee at Starbucks. And I realized, as she told me she needed to buy shampoo and conditioner in one now, because she couldn't afford to buy them separately any more. And that's the reality for far people still. In 2011, even as the economy is healing.

HOBSON: Diane Swonk, chief economist at Mesirow Financial. Thanks so much and happy New Year.

SWONK: Happy New Year to you too.