Initial claims fall but job market still fragile

Washington: There has been some good news for job-seekers in recent weeks: a steep drop in the unemployment rate in November and fewer people filing for unemployment insurance benefits than at any other time in more than three years.

But the apparent progress masks an unpleasant reality. The job market is frozen in place. Employers aren't slashing jobs, but they also aren't adding them on any large scale. Workers who have jobs are holding on to them, so that there are fewer openings for the young and unemployed to fill.

‘Groundhog Day'

The ratio of working-age people with a job has been unchanged basically for two straight years. It beats the massive job cuts of 2009, but there are frustratingly few signs that the job market will return to health any time soon.

"It's Groundhog Day," said Heidi Shierholz, an economist at the Economic Policy Institute. "It's the same thing, over and over."

The Labour Department reported last week 364,000 people filed initial claims for jobless benefits the previous week, the lowest figure since spring 2008. The numbers can be particularly volatile around the holidays, but the lower numbers continue a gradual downward trend that has been under way for months. Still, unless more people start getting jobs as well, unemployment won't come down much. The number of people employers have been hiring has remained mired far below pre-recession levels and has changed little over the past year, according to a Labour Department survey.