Optimism Run Amok

As unemployment stagnates, claims of economic recovery premature

The Obama campaign’s claims of economic growth in 2012 may be premature based on the leveling off of weekly unemployment benefit applications, according to the New York Times.

After declining steadily since the fall, weekly benefit application numbers have plateaued in the past two months, and economists say that we may not be out of the woods yet. Unemployment filings ticked up to dangerous levels in the past few weeks, hovering around the point at which economists see jobs decline.

Weekly unemployment benefit applications jumped 13,000 to a seasonally adjusted 380,000, the Labor Department said Thursday. The previous week's figures were also revised higher. The four-week average, a less volatile gauge, rose to 368,500…

The increase "doesn't ring any alarm bells," said Ryan Sweet, an economist at Moody's Analytics. "Applications can be choppy."

But the trend bears watching, he said.

"If claims continue to climb, it would be strong evidence that the job market is weakening," Sweet added.

Jobless numbers have risen along with gasoline prices, which are set to reach record levels in the summer. Under Obama, higher costs for groceries and gasoline have led to a "real" inflation rate of 8 percent—5 percent higher than the administration’s 3 percent inflation assumptions—according to the American Institute of Economic Research.