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Unemployment numbers fall by 407,000

Marketplace Staff Nov 24, 2010
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Unemployment numbers fall by 407,000

Marketplace Staff Nov 24, 2010
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TEXT OF INTERVIEW

JEREMY HOBSON: Now, let’s get into the economic indicators we’re getting from Washington this morning. The number of people filing for unemployment benefits last week fell to 407,000 last week. That’s the lowest level since a couple months before Lehman Brothers collapsed.

Let’s bring in our regular Wednesday economist Richard DeKaser of the Parthenon Group. He’s with us live from Boston. Good morning, Richard.

RICHARD DEKASER: Good morning.

HOBSON: So what do you make of this drop in people filing for unemployment benefits?

DEKASER: It’s very simple. Firms are laying off fewer folks, and the reason that’s important is because jobs really have been the shoe everyone’s waiting to drop. Profits this year are going to be up 28 to 30 percent, GDP even will be up somewhere close to 3 percent, but employment up less than 1 percent. Now that’s not all together unusual. It’s very characteristic when any economic expansion begins that people try and get as much as they possibly can out of there existing labor force before adding new hires, but we are at that point where now where we ought to see employment picking up. This tells us we’re moving in that direction. And that’s good news, not quite as good as we’d like it, but certainly a big improvement over where we’ve been.

HOBSON: OK and quickly Richard, we also got another number this morning on durable goods. It dropped by a little more than 3 percent. Explain what durable goods orders are and what this drop means.

DEKASER: Sure. These are items that will generally have a useful life of three years or better. The reason we focus on this is that it is one indication of business confidence. Businesses will defer this purchases if they’re worried — they’ll make them if they’re confident. The October results stink. No sugar coating that. But they’re notoriously volatile, so just the previous month, September, saw a 5 percent increase. And if you look at 3-, 6-, 12 month trends, we’re still looking at pretty strong growth, so —

HOBSON: OK, Richard DeKaser, economist at the Parthenon Group, sorry to cut you off. Thanks and have a happy Thanksgiving.

DEKASER: You too. My pleasure.

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