Economic snapshot | Economic Growth

Running out of steam

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A key indicator of a job market on the road to recovery is a decline in weekly jobless claims, the number of people filing first-time claims for unemployment insurance. That trend is missing from the current job market, where weekly jobless claims have held steady in the mid-400,000 range for the last four-and-a-half months. The Figure tracks the four-week moving average of initial claims for unemployment insurance from early 2007 through the week ending July 3. Numbers are calculated as a four-week moving average in order to smooth out week-to-week volatility.

In December of 2007, the start of the recession, weekly jobless claims were in the mid-300,000 range. As the job crisis worsened, weekly jobless claims rose sharply, peaking at 651,000 in March of 2009. Although the number of weekly jobless claims started to decline after that point, it has been stuck in a range of 440,000 to 480,000 for 19 weeks, with 454,000 new jobless claims in the week ended July 3. Although the official unemployment rate has edged down recently, that improvement is largely due to discouraged workers dropping out of the work force altogether. The country is emerging from the worst downturn in seven decades but the recovery is excruciatingly slow. The pace of job creation in recent months, while a dramatic improvement over last year’s job losses, is not nearly sufficient to put America’s 14.6 million unemployed workers back to work in the foreseeable future.