WASHINGTON (12/29/15)--Less than 15 million Americans will file for unemployment insurance this year, the fewest number of filings since the early 1970s and roughly half as many as in 2009, according to The Wall Street Journal (Dec. 24).
Despite the rapid improvement, however, other factors should be considered before painting the labor market as rosy.
“The labor market is certainly not the healthiest it’s been since 1973,” Zach Pandl, economist for Goldman Sachs, told The Journal. “Broader measures of slack in the economy have not improved as much as jobless claims.”
In reality, economists focus more on those who have remained unemployed for months, or those who continue to see flat wage growth or part-time hours, not necessarily on those who recently lost their jobs, The Journal said.
And while new claims for unemployment benefits have dropped this year, hiring hasn’t kept pace, which cuts against historical trends. Through November, employers added an average of 50,000 fewer jobs per month than last year, despite a 10% decrease in claims (The Journal).
That means, for many, eligibility for unemployment is likely evaporating. In fact, the share of workers seeking benefits has fallen to just more than 50% this year, the lowest in 15 years and down from a record high of 80% in the months following the collapse of the housing market.
“This late into a very slow recovery, you have a sizable population of unemployed people that are less likely to establish eligibility for benefits,” said Claire McKenna, policy analyst for the National Employment Law Project (The Journal). In previous downtimes, McKenna added, workers who were unable to find long-term work still often landed part-time jobs, renewing their eligibility for unemployment benefits.