Economic reports released over the past few weeks indicated the global economy has begun to show signs of weakness. China, which has helped to drive worldwide economic growth over the past decade, is showing signs of weakness, as its inflated real estate market and soaring inflation rate seem to have begun to slow the nation's historic economic expansion.
Moreover, the August job report released by the U.S. Department of Labor stated there was no new net job creation during the month, with employers hiring
the same amount of workers as they laid off. Still, it is exceedingly difficult to quantify the myriad components comprising GDP, experts say, and a spate of reports released this week have lent hope to a potential recovery in the U.S. and global economic landscape.
The Department of Labor releases a weekly assessment of the U.S. labor market. Analysts from the government tabulate the number of workers filing for initial jobless claims, meaning they were recently laid off from their work. The weekly job gauge can be volatile, with data sometimes varying significantly from week-to-week, as a number of phenomena – including inclement weather events – can skew data collection.
Nevertheless, on Thursday the Department of Labor announced in the week ending September 24, the advance figure for seasonally adjusted initial unemployment claims was 391,000. That figure, according to government data, represents a decrease of 37,000 from the prior week's revised figure of 428,000.
The government also affirmed the 4-week moving average for its tabulation of initial jobless claim filings
fell as a result of the latest figure. The 4-week moving average decreased 5,250 to 417,000 from the previous week's revised average of 422,250.
The weekly unemployment insurance claims data can often be difficult to understand, but essentially the data indicates there was a marked fall in the number of people in the U.S. who were laid off in the week ending September 24. While one week's worth of data is not sufficient enough to suggest a long-term trend, experts nonetheless welcomed the news.
The precipitous fall in the number of Americans seeking unemployment benefits last week could show layoffs are finally easing, economists said. In fact, the prior week's unemployment figures dropped to their lowest levels since the week ending April 2. During the first four months of the year, job growth was far more robust, and officials are hoping the data could be a harbinger of job creation in the final three months of the year.
The Associated Press reports weekly jobless claims usually need to fall under 375,000 to signal a significant expansion in the nation's labor economy. Weekly unemployment claims have not dipped below the critical threshold since February, however.
Remarks made by Federal Reserve Chairman Ben Bernanke underscore the dire straits the U.S. must pass through to return to its historically low level of unemployment. In remarks he delivered in a speech in Cleveland, Ohio, Bernanke affirmed long-term unemployment is a "national crisis." He urged lawmakers to combat it through aggressive economic maneuvering, but his calls are likely to go unheeded, analysts said, as lawmakers are loath to increase spending, as illustrated during this summer's stalled debt ceiling talks.
The Washington Post reports Bernanke said 45 percent of the unemployed in the U.S. have been out of work for at least six months, a staggering figure in terms of historical precedent and scope.
"This is unheard of," the Fed chairman remarked. "This has never happened in the post-war period in the United States. They are losing the skills they had, they are losing their connections, their attachment to the labor force."
Bernanke is noted for not only his knowledge of economic theory, but also his understanding of the historical context of monetary policy. He has faced increased criticism from Republican lawmakers over the past few months, and senior Republican leaders John Boehner, Eric Cantor and Mitch McConnell sent a letter to the Fed chairman earlier in the month, pressing the agency to reconsider its monetary stimulus proposals.
Bernanke, a Republican, ignored the letter, though, as the Fed later announced it would purchase an additional $400 billion in U.S. Treasury securities as a means of stimulating lending
by lowering interest rates. The Fed acts as an independent organization, and was created to work outside the realm of U.S. politics, prompting many officials to criticize the letter.
During the speech in Cleveland, Bernanke asserted the U.S. is tottering on the precipice. He warned the tentacles of high unemployment
are ensnaring nearly every other economic measurement.
"The unemployment situation we have, the job situation, is really a national crisis," Bernanke said.
The Fed chairman urged members of Congress to act more decisively to combat unemployment, and acknowledged the Fed is limited in its ability to single-handedly fuel growth.
"Monetary policy can do a lot, but monetary policy is not a panacea," Bernanke affirmed.