Officials are reporting that the number of workers in the United States who are filing new applications for unemployment benefits actually fell last week to the lowest level it has been in about 17 months. While some experts caution that this unexpected drop may be due to the fact that the week was shortened by the holiday, which may have prevented some people from having the opportunity to file for benefits, others are optimistic that the drop is a sign that new jobs are finally cropping up during these troubling economic times. Cause for optimism seems to be warranted given the fact that the Labor Department reports that there is typically an increase in the number of applicants during this time of the year after the figures have been adjusted based on seasonal factors.
Thanks to the drop in the number of new applications, the stock market also saw a temporary boost. The perceived improvement in unemployment also caused U.S. government bond prices to decrease while the value of the dollar rose as traders determined that the Federal Reserve was likely to increase its interest rates next year.
Of course, when it comes to examining employment data, it is important to remember that the statistics can vary significantly from one part of the country to the next. Furthermore, the national statistics can be misleading, as they are not necessarily representative of every locality. Consider these unemployment rates as posted by the U.S. Bureau of Labor Statistics for October 2009, which is the most recent data available:
Madison, Wisconsin - 5.2%
All of Wisconsin - 7.6%
Los Angeles, California - 12.6%
All of California - 12.3%
Austin, Texas - 6.9%
All of Texas - 8.1%
National - 9.5%
Despite the drop in applicants for unemployment benefits, there is still clearly an unemployment problem throughout the country. While the number of people who are still claiming benefits did drop from 5.04 million to 4.98 million during the week that ended on December 19, the number of people receiving long-term unemployment benefits did still increase. Nonetheless, some experts remain optimistic that December will ultimately be the first month in the past two years during which more jobs were created than lost. Although this possibility is still quite low, experts maintain that the likelihood of this occurring is much higher than it has been over the past couple of years.
Eric Bramlett is the broker & co-owner of One Source Realty in Austin, Texas. Eric specializes in Lake Austin real estate, Austin condos, and Steiner Ranch real estate. Eric enjoys boating, running, and hanging out with his wife & their dogs.
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