More Green shoots?
Newly released DOL data shows that the initial jobless claims have dropped 47,000 from last week's revised figure of 569,000 to 522,000 this previous week. The 4-week moving average has also dropped 22,000 and is now below 600,000 for the first time in a few months.
Continuing jobless claims paint an even better picture as the continuing jobless claims are down to 6.3 million from 6.9 million a week prior, which results in a drop of 0.5% in the insurance claims rate.
For this last piece of data, the devil lies in the details. There are two reasons for such a startling decrease. One is that the number dropped by 600,000 due to people being kicked off unemployment insurance benefits. The other, a rosier picture, is that people are finding jobs. More than 30 states, including major unemployment states like CA and MI, have extended benefits to the unemployed which makes the picture a bit fuzzier. The correct answer is likely a combination of lower job losses, people being kicked off as well as people being able to find jobs and thus no longer needing (or qualifying for) those benefits.
However, the idea that there are less job layoffs is certainly a good one. The trend in the initial jobless claims is a downward one, which certainly points to a bottoming out of the economy and could tell towards a (very slow) economic recovery.
This is definitely a trend that I can get used to.
recommend this
email
print
link to this page
Comments: 7
Taken together, the jobless rate is probably close to 25% higher than presented and some economists would have that number even higher. Your determination to keep trying to find "green shoots" ignores all the other factors that are still frightening people; declining fuel prices at a time of inflation (demand continues to tumble), gold prices despite huge increases in production are still climbing, the housing market is still falling, the minimum wage is due to increase (raising the cost of labor when there is already an over abundance of unemployed), consumer savings are climbing to decades highest (TOTAL LACK OF CONFIDENCE in economy), falling retail demand (no reason to increase production of almost anything), raising tariffs on US exports (because of US protectionist moves) and effect of possible further government encroachment in the private sector all bode for more problems in the not too distant future.
Never mind what happens if more people can be coaxed into spending again. That will increase the speed of the approach of inflation lurking around the corner. You can't just toss out that much paper debt as the government has done and not see major bad consequences.
But that doesn't change the initial jobless claims, only the continuing and UE rate.
The initial jobless claims have declined by nearly 100,000 in just two weeks. The four-week moving averages of initial jobless claims have declined by more than 30,000 during that time period as well. The initial jobless claims aren't really being fudged (unlike others) and they are continuing to show that there was a peak in initial claims. Historically, this is followed by a peak in the continuing jobless claims and a rebounding of the economy.
Taken together, the jobless rate is probably close to 25% higher than presented
25% higher than presented? So close to 30%! You're saying that close to 1 in 3 residents are unemployed. Any proof?
Even taking the U6 numbers, which does include people who have given up job hunting and who no longer collect benefits, the UE number is 16.5%, just 0.1% higher than March.
some economists would have that number even higher.
Name one.
Job losses may be bottoming out (MHO only) because businesses have shed their non essential jobs or the ones not needed for minimal functioning. I understand the historical aspect of what you are saying but a problem with using historical analysis is that we are in an era of problems never before experienced (not even post WW2 demobbing). Gov debt is the worst its ever been and the effect of government debt on rebounding economies is fairly well understood to be negative.
Nationally unemployment is officially just under 10%, 25% of that is 2.5 (+/-) or a total of maybe 12.5%, not 30% You say 16.5%, a somewhat higher number than I will claim with confidence based on numbers I've seen or heard discussed.
A few I've heard or read that give higher numbers than the government stats would be people like M. Skousen, D. LaBand, P. Krugman, A. Laffer, A. Shleas, J. Sophocleus, R. Ekelund, and R. Tollison. There have been others over the last few months but all have said to one degree or another the gov stats on UE is understated.
Ha. Ok, that's a more reasonable assumption. Just a misunderstanding.