Weekly unemployment lowest in nearly four years

Diane Swonk Jan 19, 2012

Jeremy Hobson: The number of people applying for unemployment benefits fell by 52,000 last week to 352,000. That is the lowest level in almost four years. And it’s where we’ll start with Diane Swonk, chief economist with Mesirow Financial, who’s with us live from Chicago, as she is every Thursday. Good morning Diane.

Diane Swonk: Good morning.

Hobson: Well what do you make of the drop in the jobless number after last week’s relatively high number?

Swonk: Well, of course, no week is a trend but I think there’s a couple things going on. One, we saw the Martin Luther King holiday, which prevented some people from filing in states like California. But the trend is none less good in the private sector. What we’re starting to see is more public sector layoffs — not coming from cuts at the state and local level, but now coming from cuts at the federal level, in both postal employees being cut and veterans returning home and applying for more unemployment insurance.

Hobson: And Diana, I want to get your thoughts on the other economic indicator that just came out this morning. Consumer prices, according to the Consumer Price Index, didn’t change a bit last month there’s still no price inflation going on.

Swonk: Exactly what we saw was, consumers, everything from the prices at the pump falling but really consumers being savvy about their holiday shopping and deep discounts, shopping for those discounts. Where there were price increases — ironically enough — were where there’s money: in the corporate sector. Corporations giving big, more lavish holiday parties and entertaining more — that’s where you saw a little more inflation this month.

Hobson: Diane Swonk, chief economist with Mesirow Financial, thanks as always.

Swonk: Thank you.

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