This morning, the first-time jobless claims fell, again (See Full Story). This time by 13,000 "fewer" new claimants than last week. Ever since the jump in claims that occurred in-and-around the effective date of the new the minimum wage, the unemployment insurance claims have been falling.
If we were actually going into a recession, these numbers should be climbing. A best, during any recessionary period, they would just be holding and not falling. The fact that they are falling indicates, at least to me, that the third quarter, like the last two quarters, may be wind up being "positive" in growth. Don't forget, you need two "negative" (no-growth) quarters to normally declare that we are in an actual recession. We had growth of 1.8% in the second quarter and, before that, we had growth of just under 1 percent for the first quarter. Unless business activity completely and literally falls of the cliff in September, I seriously don't think that the this year's third quarter will show anything but positive growth.
Three factors might be accounting for this. First, over the last few years, the U.S. dollar has fallen significantly against other major currencies. This has made our products cheaper to sell overseas. At the same time, it has made foreign products more expensive; especially imported oil. As a result, these conditions tend to force foreign interest in our own products and to force domestic buying in our now-competitively-priced American-made products. Last month that fact was shown in good export/import activity; except for the fact that we keep importing massive quantities of foreign oil. Secondly, the stimulus checks are still in the process of being used up. This is helping our local economies and keeping jobs in tact at service oriented businesses like fast food restaurants, etc. Third, our economy is still pretty powerful despite the oil/energy and credit crises. Our economy has always been strong enough to to support "two" wage earners for most still-married families and, on top of that, absorb an additional 15 to 20 million illegal alien workers. And, do that while still maintaining an unemployment rate of below 6 percent. No other economy in the entire world can boost that fact.
I realize that the Democrats want to see a recession so that they can look like the white knights that "could" save the economy and, so, they can blame the Republicans and George Bush as the culprits for a bad economic situation. As usual with the Democrats, they would just love us to fail. They wanted us to fail in Iraq (which we haven't) and they would love our economy to go belly up. For them, it helps play into their "constant doom-and-gloom portrayals" of the United States. But, my guess is that all bets are off in having a negative quarter this time around. So, that means that we will probably go to the polls with another positive quarter under our belts. It also means that we might not see a declared recession until Spring of next year or even later. I'm sorry, Mr. Obama! Poor Barack has be saying that we were in a recession since 2007. But, well, we're still waiting, Mr. Obama!
Lastly, a couple of comments about the "linked" news report in the first paragraph. That news report states that any jobless claims about 400,000 jobs is considered to be a weak economy. That may have been true 18 years ago but, based on the size of our work force, today, that number is better stated at 450,000 or higher; probably, 500,000. Second, the four-week moving average is high because of a totally unexpected jump of nearly 80,000 jobless claims that occurred around the time of the new minimum wage. With claims falling, that four-week average will be coming down. (Apparently, the CNN writer who wrote that report doesn't know how the calculation for "averages" works!) But, we know that CNN, like a lot of news media, is an Obama supporter.