The Labor Department reported on Thursday, February 21, that unemployment edged upward by 20,000 last week to a seasonally adjusted 362,000. This brings the average for first time jobless claims to 360,750 over the last four weeks. This is up by 8,000 from the previous four-week average and the highest it has been in six weeks.
Four-week average offers a more accurate picture
Economists prefer to look at the four-week average for unemployment claims for a more accurate economic picture. It helps smooth out the effect of weather events and other out-of-the-ordinary influences, so the four week average is a good indicator of a sluggish economic recovery.
Role of job growth
While the national unemployment rate ticked up from 7.8% in December to 7.9% in January, it is important to remember that unemployment numbers fluctuate. While the current report shows it inching in the wrong direction, the good news is that job growth from November to January improved with an average of 200,000 jobs added per month. Economists estimate that the economy expanded at approximately 4% (annual) in the fourth quarter of last year. Analysts are hopeful hiring will continue at last year's pace and gradually bring unemployment numbers down as job growth fuels recovery.
States that gained the most jobs in December included New York and New Jersey. This is especially good news for New Jersey which is currently experiencing 9.6% unemployment. Georgia and Missouri also experienced significant job growth for December.
Millions of long-term unemployed
Democratic strategist James Carville admitted this week that unemployment is the country's biggest problem. Millions have been out of work for 27 weeks or more. These long-term unemployed count for 38% of the unemployed in this country. Job growth must surpass jobs lost to see this change.
"Approximately 12 million workers are currently unemployed. Of those, 4.7 million are considered long-term unemployed, having been jobless for 27 weeks or longer. They account for 38 percent of the unemployed." – NCSL