Unemployment filings hit a 55-year low
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What is the main topic discussed in this episode?
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In exactly this order, the labor market, the bond market, the health care market, and the AI market. But we're going to make it interesting. From American Public Media, this is Market Class.
In Los Angeles, I'm Kai Rizdal. It is Thursday today, 23 July. Good as always to have you along, everybody. We begin today with an exercise familiar to anyone who deals with a lot of economic data. An exercise that can fairly be summarized as... Huh. What do you suppose that means? The proximate cause was today's update on first-time claims for unemployment benefits. They fell by 22,000 to the lowest absolute level they have been since literally 1969, when, obviously, the labor force was far, far smaller. So, huh. What do you suppose that means? Well, it could be a sign of a strong labor market with layoffs extra low and those who do get laid off finding new jobs so quickly they barely have time to apply for unemployment.
Or it could be something else. Marketplace's Mitchell Hartman gets us going.
It used to be that first-time jobless claims provided a pretty good snapshot of the labor market.
But, says Michelle Evermore at the National Employment Law Project, Initial claims data is no longer a very reliable economic indicator concept.
She says fewer people who get laid off are applying for unemployment insurance. Many states now offer less than 26 weeks of benefits. Eligibility's been tightened, and unemployment checks are anemic. It replaces so little of prior income. People are better off taking some sort of terrible gig job than they are collecting unemployment. Fewer than one in three unemployed people are even eligible, says University of Michigan economist Betsy Stevenson. Meaning low and falling jobless claims?
Doesn't mean we have a robust and healthy labor market.
She says it is pretty good if you have a job and can keep it, but...
A low hire, low fire environment is particularly hard for people to enter or reenter the labor market.
Meanwhile, the percentage of people who've been job searching for six months or longer is up sharply over the past year. Economist Daniel Zhao at jobsite Glassdoor says these workers are much less likely to reject any job offers they get. They feel like they don't really have options. Younger, less experienced workers are also facing big challenges, says economist Sneha Puri at the Indeed Hiring Lab. While senior level job postings are up 15 percent year over year. They're actually down 6.3 percent for entry level roles. At the same time, more experienced workers are applying for those entry-level positions, increasing the competition for recent high school and college grads. I'm Mitchell Hartman for Marketplace.
On Wall Street today, I mean, traders looked around and saw the war and all the AI spending and decided they were not having it. We will have the details, though, when we do the numbers.
We spent some time yesterday talking about the bond market. We're going to do it again, but different, because of what Greg Ip wrote in the Wall Street Journal the other day. A piece headlined, How Sky-High Deficits Threaten the Bond Market. Greg, it's good to have you on.
Oh, thanks for having me, Kai.
All right, from the headline of this piece, How Sky-High Deficits Threaten the Bond Market, how then? Explain, please.
Sure. Well, we are running very large deficits. The largest deficits... relative to GDP that we've ever run in peacetime on an ongoing basis. And what that means in practical terms is that every year the Treasury has to come to Wall Street and say, we need to borrow $2 trillion by selling you Treasury bills and Treasury bonds. And it is getting more and more challenging to sell that debt.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–5:35
2
How low are initial unemployment claims and what does a 55‑year low mean for the labor market?
5:35–8:56
3
Why might record‑low jobless claims be a misleading indicator of labor market health?
8:56–13:14
4
Who is most hurt by a 'low‑hire, low‑fire' labor market and why are entry‑level roles shrinking?
13:14–19:46
5
How are sky‑high federal deficits threatening the U.S. bond market and interest rates?
19:46–26:53