Weekly Jobless Claims Ė Why Are We Not Seeing Any Major Improvements

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The weekly jobless claims report is a measurement of how many people have filed for unemployment benefits. It is one of the key indicators of the health of the United States economy. Lower numbers in this report indicate an improving job market, and higher numbers indicate a deteriorating job market. There is no set standard for good numbers and bad numbers. The initial jobless claims numbers are compared from week to week. If the economy is improving, then the numbers should gradually fall.
In the May 28, 2011 report, weekly jobless claims dropped 6,000 to 422,000 unemployment claims. This number is still much higher than it was before the recession began in 2008, but it is lower than it was in 2009.
It seems the economy is not recovering the way it was before 2008. Weekly jobless claims are still high compared to 2008. There are many reasons why this is happening:

1.Businesses in the USA donít know what the future holds in the economy.
Corporate America doesnít know how to react to the recent economic policies of the Obama administration. They have repeatedly talked about raising taxes on the wealthy. They are still talking about this even with a Republican majority in the House of Representatives. As the debt of the federal government explodes, legislatures are looking for ways to get more money into the federal government. Eventually the federal government may not have any choice but to raise taxes to pay the interest on all of the debt we have to other nations.


When the federal government talks about wealthy people, they are usually talking about small business owners. The vast majority of Americans still work for small businesses, and small business owners canít hire people if they donít know what their debt obligations are going to be two and three years down the road. Business owners donít trust the government. Weekly jobless claims will be high as long as small business owners are afraid of the future economic conditions.

2.ObamaCare mandates are extremely expensive for small business owners.
Small business owners are also afraid of ObamaCare. Despite the passage of the new healthcare law in 2010, there are many legal challenges to these laws. No one really knows what the future holds for small business, but in its present form, small businesses will not be able to provide affordable healthcare. The Obama administration has already issued waivers to many corporations for many of the provisions of ObamaCare. The fact is that many businesses simply canít afford all the provisions and new regulations that the new laws require. With over half the workforce of the United States employed by small businesses, many people are affected by these laws. Weekly jobless claims will continue to trend higher with Obamacare mandates on the horizon.


3.Housing values have not recovered, and this decreases disposable income.
People simply donít have the money to spend like they have in the past. This includes small business owners, so it is hard for them to hire people to bring down the weekly jobless claims. Many people are underwater on their mortgages, so they are applying extra money to their mortgages to try to catch up. With no equity available, people canít spend money on luxury items or other entertainment stuff anymore. This means that many businesses are suffering, so they are not able to hire more people.

Weekly jobless claims will continue to be high until the economic policies change in Washington DC. I donít expect weekly jobless claims to trend down until after we see the results of the 2012 presidential elections.

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