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A look at jobless claims, Intel-McAfee

Diane Swonk

TEXT OF INTERVIEW

BILL RADKE: Let's say good morning to economist Diane Swonk
of Mesirow Financial. She joins us live every Thursday from Chicago. Hi, Diane.

DIANE SWONK: Good morning.

RADKE: As I said, new unemployment claims jumped last week to half a million. I thought they were supposed to fall.

SWONK: Well, they are supposed to be falling, but we do have some distortions in there. The auto industry had later closings than usual, which is buoying claims along with the end of census hires. But more importantly, veterans are beginning to return from Iraq and that's starting to buoy the market because they're coming back to a more hostile labor market than when they left.

RADKE: So returning veterans is, I'll grant you, an unusual factor. But Diane, is that supposed to make us feel better?

SWONK: Well, you know, we like the veterans to come home. But the problem is we'd like to see an employment market that is strong enough to absorb them and give them jobs when they come home. And this is something that, by this stage of the game, should have been a blip on the radar screen, not such an extraordinary surge in unemployment claims.

RADKE: And finally, I mentioned Intel buying McAfee -- that's a huge transaction. Does that say good things about the economy?

SWONK: Well there's no question corporate profit has come back and mergers and acquisitions activity is up quite dramatically. The large corporate sector, believe it or not, is actually hiring more than it's firing. Not by much, but by a little bit. What's really been missing in this economy is the comeback for small businesses, which is the backbone of hiring. And small businesses just don't have access to the credit markets like large corporations do. And they're still waiting for a stronger recovery out there.

RADKE: Well, we'll keep watching hoping for improvement. Dinae Swonk from Mesirow Financial, thanks.

SWONK: Thank you.

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