Initial Jobless Claims
-395,000 for week ended August 6
-Down 7,000 from previous week’s revised 402,000
-4-week moving average 405,000
-First time below 400,000 since April
-Claims were 398k two weeks ago but revised to 401k
In this Bloomberg piece, Alan Krueger of Princeton University explains his thinking about how we should start looking at unemployment. Krueger’s point is that when the 99 weeks of unemployment benefit expire at the end of this year we may see the unemployment rate fall because folks leave the workforce. He suggests that we should start looking at the employment-to-population ratio, or the share of the population that is employed. It is not the unemployment rate or Jobless Claims which drive GDP. It is the labor participation rate.
The Trade Balance for June was -$53.1 Billion. Both Exports and Imports fell because commodity prices (oil and food) fell.
Keeping in mind that GDP = Consumer spending + Investments +Government Spending +(eXports – iMports) this is (X-M) and it drains from GDP.
One topic which should be discussed is that the Eurozone debt crisis will likely result in fewer exports from the U.S. to Eurozone nations. Europe gets 20% of our exports.
In this graph of the Trade Deficit the grey bars are the monthly data and the red line is 6-month moving average.