New jobless claims declined by 6,000 the last week of July versus predictions of an increase of 3,000. This suggests that business owners are willing to keep people because they have confidence the American economy is improving. In support of that notion, the decline continues a nine-month trend of improving labor market data. Concurrently, the international trade deficit narrowed.
Despite the best efforts of Republicans in Congress to ensure a collapsing economy and the highest possible unemployment rate as the election approaches, the economy continues to improve, as it has done steadily for the past nine months. In fact, the second quarter’s growth rate, pegged initially at 1.5%, will be revised upward to 1.8% in the next few days.
As new claims for jobless benefits declined by 6,000 the last week in July, 9,000 below the predicted number, the number of newly created non-farm jobs continued to increase, by about 163,500 for July, albeit still at a rate below that needed to cover all new workers coming into the workforce. The America economy needs approximately 250,000 new jobs per month for that. These statistics taken together resulted in a one-tenth point increase in the unemployment rate.
The four-week moving average for July showed an increase for the total month in new unemployment insurance claims of about 2,500. However, July is a difficult month to assess statistically, because it is the month in which the auto companies close production plants for retooling. Suppliers and vendors, perforce do the same thing, or at least are subjected to significant temporary reductions in their workforce.
As the jobs picture continued to include, the US Trade Deficit 10.6% to $42.9 billion Economists had predicted a deficit of $47.5 billion. The deficit represents an outflow of US dollars, and any reduction in the outflow is an economic improvement in and of itself.
“Gloom-sayers” looking for negatives to assign to the President, insist that there is no improvement in the US economy. Taken together, the long-term run of new unemployment claims and unemployment rates trending down, new jobs trending up and an improvement in the US trade deficit show that they are wrong. The US Bureau of Labor Statistics graphs salient employment data.
Despite all attempts to derail it, the American economy is clearly on the way back. The State of Michigan, for instance, has announced plans to add to its new jobless claims. The State announced plans a few days ago to lay off three-quarters of its unemployment insurance staff over the next two months for lack of work.