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Thursday, February 07, 2013

Jobless claims fall slightly

The initial weekly jobless claims data this week suggests the jobs market remains in the pattern it has been in for awhile.

The number dipped slightly, by 5,000, to 366,000. That's a good, not great range. The economic consensus is that 400,000 is essentially the break-even point; anything below 375,000 suggests growth in the jobs market. The less volatile month-average came in at an even better 350,000.

For job creation to really take off, though, those numbers would probably have to drop into the 330,000 range for several consecutive weeks. Given that the Congressional Budget Office has projected that the deficit will fall below $1 trillion to $845 billion this year and maybe to $423 billion by 2015, maybe it is time to rethink our focus on the short-term deficit.

The long-term debt is the bigger problem, and that is being driven largely by the retiring of the largest generation in the country's history, meaning more people will be on Medicare and Social Security than ever have - and they will live much longer than previous generations. That's why our efforts should be focused on reforming the tax code and entitlements instead of obsessing over immediate spending cuts, which have already slowed the recovery and hurt the jobs market.

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