Economics teaches us that companies do not have an unlimited number of employees to lay off. Data backs this up.

“There is only so much companies can cut layoffs before they have to start thinking about adding to headcounts,” said Guy Berger, an economist at RBS Securities Inc. in Stamford, Connecticut, who projected claims would drop to 325,000 last week, the lowest forecast in the Bloomberg survey. “The longer this continues, the more likely companies will have to add to headcounts….”

Applications for unemployment insurance payments decreased by 4,000 to 323,000 in the week ended May 4, the fewest since January 2008, Labor Department figures showed today. The four-week average declined to 336,750, the lowest since November 2007, the month before the start of the worst economic slump since the Great Depression.

And with fewer people getting shit-canned, fewer people are taking more than an extra month to pay their mortgage.

The rate of U.S. mortgages that are delinquent or in foreclosure fell to a four-year low as job growth helped some borrowers catch up on payments and rising demand for homes made it easier for others to sell.

Home loans that were at least one month late or in the foreclosure process dropped to 10.3 percent of mortgages in the first quarter, down from 11.25 percent in the fourth quarter and 11.33 percent a year earlier, the Mortgage Bankers Association said in a report today….

“The jobs are the key,” Jay Brinkmann, the Mortgage Bankers Association’s chief economist said in a telephone interview from Washington. “People with steady paychecks are less likely go into default.”

Jobless Claims in U.S. Unexpectedly Fall to Five-Year Low [Bloomberg]
U.S. Mortgages at Least 30 Days Late Fall to 4-Year Low [Bloomberg via BW]

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Comments (3)

  1. Posted by 100+Yen | May 9, 2013 at 4:36 PM

    who gives a shazar? it's RBS… also it's shazar….

  2. Posted by obinna | May 14, 2013 at 5:58 PM

    and if you lay off all your employees, who'll work for you

  3. Posted by beginner golf swing | June 4, 2013 at 10:01 PM

    The question therefore is, why layoff, if you know that you will be hiring later? Where's the planning in that? smh.