Suddenly the sun came out… again. New filings for jobless benefits dropped a hefty 27,000 last week to a seasonally adjusted 365,000. It appears that the downward trend in new claims is intact after all. The last several weeks had raised new doubts, courtesy of a modest rise in new claims, but today’s news takes the edge off the worst fears. As always, caution is required for reading too much into any one number for this volatile series. But the trend is far less prone to short-term noise and on that score there’s cheery news in today’s update, as the following charts show.
Daily Archives: May 3, 2012
A New Old Explanation For Recessions & Financial Crises
Edward Conard, a retired executive of Bain Capital and a major donor to Mitt Romney’s presidential campaign, tells us that the precipitating cause of the 2008 financial crisis was a surge in demand for liquidity. He’s right, of course. The appetite for safety went into overdrive in the final months of that fateful year. This may be a controversial explanation in some circles, but it shouldn’t be. Divisive or not, Conard’s accounting of how the economy nearly melted down is an excuse to consider how far we’ve come (or not) in dissecting the business cycle when it goes negative in the extreme. It’s also an opportunity for a refresher course on considering the practical policy responses.