Unprecedented: Jobless Claims Still Over 600,000

The U.S. Department of Labor released the latest data for unemployment insurance as it does every Thursday at 830ET. The seasonally adjusted numbers reported were 614,000 initial claims and 6.702 million continuing claims. While this report reinforced the trend of a general decline in jobless claims, it also makes plain that this decline is exceedingly slow.

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We have now seen 22 consecutive weeks with jobless claims over 600,000. This is unprecedented. And while these figures are larger than in previous recessions because the workforce is larger, they are declining half as slow as they have done previously.

Downward trends that are re-enforced.

1. Year-on-year initial claims numbers are declining. The seasonally-adjusted 4-week average is now 615,250, down from a peak of 658,750 in April.
2. Year-on-year initial claims comparisons are declining. (Four-week) average seasonally-adjusted numbers are 221K above last year, down from a peak of 300K. Unadjusted numbers are 203 above, down from a peak of 327K.
3. Year-on-year continuing claims numbers and comparisons are now declining. This trend is in its infancy. However, as many workers are still not finding employment before leaving unemployment insurance, this data series is not a very good indicator of the employment situation.

The unemployment report today showed that the U.S. lost 467,000 jobs in June. Therefore, we will need to see weekly claims much lower in order for the economy to start adding jobs.

Source

Unemployment Insurance Weekly Claims Report – US Department of Labor

Comments

[Dave Wrixon:]

Yeah, not sure how to square these with 0.1% increase in jobless. If these figures are to be believed then people must be getting new jobs as fast as they are losing the old one. Do you believe that?

Jul 02 01:05 PM

[John Galt:]

What I am trying to figure out is why losing jobs at a slower rate is such good news that makes the market rally... Inprovement in the second derivitave blah blah blah.

Losing Jobs at a faster rate = bad news
Losing jobs at a slower rate = good news
so is does losing jobs at a constant rate = ok news ?

Jul 02 01:34 PM

[Moon Kil Woong:]

As long as the government keeps propping up the economy with your future taxpayer money (deficits) and the Fed monitizes the economy can not contract properly (misallocations are corrected and inefficiencies get purged). Thus we take years rather than days or weeks to hit the bottom and recovery is squelched as every sector of the economy buckles under. This is a repeat of Japan's QE except we have massive debt, a weakening currency, and inflation to worry about as well.

The market should have blown off even more. Although the numbers are universally bad, the worst is that the service sector is starting to collapse leading to months more of terrible unemployment numbers.

Jul 02 10:48 PM

[toobad41:]

Perhaps the 6.7 million unemployed is the new norm. With the US of A industrial complex winding down where are we going to put all these people? Manuafacturing is outsourced, textiles are outsourced, more and more produce comes from south of the border (way, way south). Is it really shocking to see unemployment claims in the range of 600,000 plus? Another question is this..How many of those 6.7 million are victims or perhaps their lack of any skill? Maybe self-employment is a better choice. The US of A is still the land of opportunity. Get with it.

Jul 03 09:29 AM

[Gregman2:]

Again, aside from capital contraction and contracting demand, why are jobs being permanently lost? Do we have any stats on China's unemployment?

Jul 03 12:27 PM

[Jason Rines...:]

The simple answer is that we consume more then we produce and financed the difference in easy monetary policies and debt issuance. The US economy without finance did not grow past 2000. The US will revert to this mean or a 10 T economy. US government must now decide between it's citizens or international interests and restore the consumption/production imbalance. Unfortunately, the decisions already made and what is on the table from government ensure a lost decade in best case scenerio or if US defaults on debt then very serious geopolitical fallout/consequences. We have backed ourselves into a corner and few will be spared the pain of complete restructuring.


On Jul 03 12:27 PM Gregman2 wrote:

> Again, aside from capital contraction and contracting demand, why
> are jobs being permanently lost? Do we have any stats on China's
> unemployment?

Jul 06 11:57 AM