If You're Looking for Work, the Outlook is Brightening

While there's great debate about why so many Americans have dropped out of the workforce, there is new hope for those who have stuck it out in the labor pool.

The government reported on Thursday that the number of workers filing first-time claims for unemployment benefits dropped to 298,000 in the week ended Aug. 23, another sign that the job market is stabilizing.

This marked the second straight week of declines in initial claims. More importantly, the four-week average claims figure itself is now just below the 300,000 mark — at 299,750 — putting the job market back where it was before the global financial crisis began in 2007.

US Initial Claims for Unemployment Insurance data by YCharts

To be sure, pessimists (and market bears) will point out that the overall unemployment rate, which stands at 6.2%, still has a ways to go before improving to pre-crisis levels:

US Unemployment Rate data by YCharts

And as economist Ed Yardeni, head of Yardeni Research, points out, Federal Reserve chair Janet Yellen and other policy makers don't look at just this one measure of the job market. In fact, she looks at 19.

"Among her favorite labor market indicators is wage inflation," he said, "which remains too low, in her opinion." Money's Pat Regnier has more about that here.

US Real Average Hourly Earnings data by YCharts

But Yardeni points out that wages and salaries on a per-payroll employee basis — in other words, measuring folks who have a job —are nonetheless up 8% over the past 10 years.

So it just goes to reinforce the divide: If you're employed or in the work force, things are probably looking up. If you've dropped out, on the other hand, the picture may not be so bright.