Initial claims for unemployment benefits rose 15,000 to a seasonally adjusted 381,000 last week, the Labor Department reported today. CNBC goes on to report: "Claims remain below the 400,000 mark that is normally associated with an improvement in labor market conditions."
But these aren't normal market conditions. In a normal economic recovery, new firm and job creation are higher than recession levels. That is not the case in the Obama recovery.
While job losses have slowed, job creation has not picked up. In fact, as The Heritage Foundation chart based on Bureau of Labor Statistics data above shows, while gross job losses are now at their lowest level in years, so are gross job gains. The Obama economy is simply creating new firms at a much slower pace than previous economies. And when new firms do get created, they are hiring far fewer employees than new firms used to.
As recently as 2008 the World Bank ranked the United States the 4th easiest country in the world to start a new business in. Today, the World Bank ranks the U.S. as the 17th best place to start a new business. The biggest reason for the bad ranking? A complicated tax system that ranks 72nd in ease of compliance. Uncertainty from major financial and health care reform are not helping either.