How Long Until We Reach 6.5% Unemployment?
The United States Department of Labor released initial unemployment claims for the week ended December 15 that could weigh on the markets heading into the Christmas holiday. The government report shows that first-time claims grew by 4.9 percent to 361,000, their first increase in five weeks.
This was the last unemployment reading to be released before the holiday, and the increase in claims was not totally unexpected. Economists surveyed by Bloomberg predicted a median of 360,000 claims, a 4.7 percent jump. The Labor Department said there was nothing unusual affecting this week’s numbers.
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The unemployment rate fell from 7.9 percent to 7.7 percent in November, a full point lower than in November 2011, but still 1.2 points above the Federal Reserve’s target rate of 6.5 percent. It would require the immediate creation of about 1.9 million jobs in order to reach that rate, and the Fed expects it will take (at minimum) over a year to get there, and more likely between three and five years. And the longer it takes, the more jobs need to be created in order to keep up with population growth…