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The Labor Department delivered more good news on the economic front today, announcing that the level of new unemployment claims fell last week to 319,000 -- the lowest level since December 2001:
For the week ending Sept. 4, new applications for unemployment insurance dropped by a seasonally adjusted 44,000 from the previous week to 319,000, the lowest level since July 3, the Labor Department reported Thursday.
The decline of 44,000 was the largest decrease since the week ending Dec. 8, 2001. ... The latest snapshot of the layoffs climate was better than analysts were expecting. They were forecasting a smaller drop of around 17,000 for last week.
"We're getting there. When you look at the underlying trend, the jobs picture is improving," said Richard Yamarone, economist at Argus Research Corp.
Bill Clinton's advice to Kerry to focus on the economy looks more and more like a losing proposition. The economy continues to expand, and as Alan Greenspan noted yesterday, the summer slowdown sprang from a spike in energy costs rather than intrinsic weakness in the American expansion. In fact, economists expect the Fed to bump up interest rates this month to keep the expansion from overheating into inflation, hardly a likely move if the economy suffered the way Kerry depicts.
Kerry has recently focused more on the budget deficit, on which Bush is genuinely vulnerable to some small degree and for which Kerry has displayed remarkably consistent stands -- at least for Kerry, known as a deficit hawk even during the first Clinton term. Unfortunately, two issues work against Kerry on the deficit. First, his proposed federal programs will cost over $2 trillion in additional spending, meaning that his hawkishness on the deficit will have to be accompanied by significant tax hikes or deep slashes in spending, neither of which he's outlined. Second, Kerry keeps forgetting that we are at war, and budget deficits aren't really high up on our priority lists at the moment. They're an issue, but pressing it at the expense of all other issues will only make him appear out of touch.
Kerry finds himself trapped on all other issues by his contradictory positions and opportunism at different points during this election. The only deficit he needs to address is his credibility deficit. Until that gets resolved, nothing else he says will matter.Sphere It View blog reactions
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