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The Real Numbers Behind the Unemployment Numbers

2 comments  |  by: Ray July 31, 2009
   
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There was an increase of new claims which was above expectations, but the decline in continuing claims was the driver of yesterday’s rally. Here is the way I see it, if people fall off the unemployment rolls they do not count any longer. Considering we are seeing the beginning of a “decrease” in ongoing claims we need to look deeper into the numbers.

Between regular unemployment claims and emergency unemployment claims a person can remain on the rolls for a long time, but not indefinitely. We are seeing the beginning of people completely falling off the unemployment rolls, not because they have a job ut simply because they exhausted their benefits. Emergency claims are on the rise as illustrated in the data, but not talked about in the media.

In the report they said; “States reported 2,656,879 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending July 11, an increase of 24,518 from the prior week. There were 127,438 claimants in the comparable week in 2008. EUC weekly claims include both first and second tier activity.” This is less then encouraging, but what do I know.

Enjoy the rally and the temporarily good, in the eyes of some people, economic data and the overbought rally. Frankly, I believe we are headed for a spectacular down draft in the markets as the data does not support such a rally. Not to mention, 500K a week in new claims, consistently, in a major problem.

About the author: Ray
Ray picture
I have been in the financial services industry for 15 years as a broker, wholesaler and as a director of research for insurance products where I commented on current events and have written studies. I am less active on the trading front than I used to be and primarily buy ETFs and mutual funds,... More
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  •  

    Real unemployment is closing in on 20% if the way it was figured out in the 60's before it was 'corrected' for political reasons.

    This is going to cause a lot more foreclosures for quite a while.

    With the repubs blocking a good energy policy, and fixes for our other problems, which could cause many more jobs I just don't see how we are going to come out of this for yrs.

    If the economy does come up then oil will head for $5/gal crushing it.
    2009 Jul 31 12:09 PM Reply
  •  
    People are transitioning from being no longer unemployed to...being self-employed and uninsured. Aka, street vendors;-)
    2009 Jul 31 11:28 PM Reply