Scott Sumner reports:
…the ratio of new [unemployment] claims to pop is roughly back to the boom levels of 1999-2000 and 2006-07. And yet the other indicators (total jobs, unemployment rate, etc), remain deeply depressed. I can think of two ways to interpret this data:
1. Casey Mulligan is right, we have lots of structural issues that are causing high unemployment right now. The job market’s not that bad, it’s just that lots of people don’t want to work at the wages being offered, or are frozen out by the 40% rise in minimum wages during the housing bust.
2. AD is still the main problem, but since 1975 there’s been a long term downward trend in the claims/pop ratio, for some mysterious reason. That trend would explain why (according to new claims) the labor market looked as good in 2006 as 2000, even though most people think it was not.
On this topic, here is a kebko post of interest; he argues that employment has more or less recovered, once we adjust for various obstacles.