January 14, 2012 Jobless Claims Fall To Lowest Level Since 2008: 3 Reasons Why This Could Increase Consumer Demand:
Unemployment is falling.
The number of Americans seeking jobless claims benefits fell to the lowest level in almost four years. The Labor Department said today, the number of people seeking unemployment benefits fell last week (for the week ended January 14, 2012) by 50,000 to 352,000. This is the lowest level for jobless benefits claims since April 2008 and further evidence that the unemployment situation is getting better – labor participation rate issues aside. The job market is getting stronger as we predicted earlier and we expect the unemployment rate to fall.
Employment volatility is common after the holidays and jobless claims rose slightly recently but the overall trend continues to be in a positive direction. At this rate, unemployment could fall beneath 8.0 percent in 2012 if aggregate demand increases from a three-fold effect:
- increased overall employment – a greater amount of consumers with more money overall to spend.
- increased wages – good workers will get hard to find wages could increase further and consumer incomes are already slowly rising
- improved sentiment – employed people are less worried they might be fired and believe they will have a job in a few month, they will spend more than in prior months