In another piece of good economic news, new unemployment claims, a week-on-week measure, have dropped to the lowest level in four years. The Wall Street Journal reports:
Initial unemployment claims dropped by 13,000 to 348,000 in the week ended Feb. 11, the Labor Department said Thursday in its weekly report. The previous week’s figures were revised up, to 361,000 from 358,000. Economists surveyed by Dow Jones Newswires had expected claims to climb by 7,000 to 365,000.
The decrease was the third in a row and carried new claims to their lowest since the week ending March 8, 2008. It gave another signal that the labor market is healing. Earlier this month, the Labor Department reported non-farm payrolls climbed by 243,000 jobs in January, the biggest gain in nine months.
The Obama administration will surely claim this as more evidence of a well-executed economic turnaround, thanks to their stimulus spending, but there’s another interesting news bit today, from a new book by Noam Scheiber of The New Republic, about the government’s response to the financial crisis. Apparently, the head of President Obama’s Council of Economic Advisers, Christina Romer, initially suggested a $1.8 trillion stimulus, based on the Keynesian calculations of how much government spending was necessary to fill the economy’s “output gap.” Larry Summers, then in charge of the National Economic Council (which is meant to translate economic thought into useful policy for the president), rejected it as politically unfeasible, so she came back with $1.2 trillion, which was also rejected, before it even got to the president. More here.