A look at jobless claims, currencies

TEXT OF INTERVIEW

BILL RADKE: This morning, the government said fewer Americans filed new unemployment benefit claims last week. Speaking of which, is the global reaction to unemployment threatening free trade? Let’s welcome Economist Diane Swonk of Mesirow Financial. She joins us live each Thursday from Chicago. Hi Diane.

DIANE SWONK: Good morning.

RADKE: New claims for jobless benefits fell last week by 11,000 — better than expected — how good is that?

SWONK: Well, it’s good in that it’s the right direction. It’s bad in that last week’s data was revised up and basically we’re still on trend for unemployment claims being way too high. And tomorrow’s data on employment will likely contract because you’ve got more than 80,000 census workers still coming off — those temporary hires the government made to do the 2010 census.

RADKE: OK. Sorry to hear that. Unemployment is high in lots of countries, Diane, and this week we’ve been seeing these countries competing to stimulate their own economies — possibly at each others expense. How concerned are you that hard times will bring a wave of economic nationalism and protectionism?

SWONK: I’m certainly very concerned. What we’ve seen is a real reaction out there. One is to manipulate currencies, to try to get exports up. And if this doesn’t work, some of these countries are threatening fairly major tariffs, including our own. And unfortunately, the lessons of protectionism — as simplistic as they seem to someone on the street — the lessons that we’ve learned from the Great Depression and other periods of high protectionism is that they cause further unemployment. Not more employment out there. They don’t protect many jobs, they actually cost us even more jobs and our economies contract when we stop trading with each other. So this is something of real concern, especially as we run into those November elections, which are going to be tough no matter how they’re cut.

RADKE: We’ll keep following this story. Economist Diane Swonk

SWONK: Thank you.