Jobless Claims Fall to Lowest Level in 37 Weeks 22 comments
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WALL STREET JOURNAL -- In a positive sign for the labor market, the number of U.S. workers filing new claims for jobless benefits decreased more than economists expected last week. Initial claims for jobless benefits fell by 33,000 to 521,000 in the week ended Oct. 3, the U.S. Labor Department said in its weekly report. The last time initial claims were this low was on January 3.
The four-week moving average of new claims, which aims to smooth volatility in the data, also fell by 9,000 to 539,750 from the previous week's revised figure of 548,750. The last time the four-week moving average was this low was on January 17 (see top chart above).
Economists at JP Morgan Chase & Co. wrote in an economic analysis last week that claims generally appear to be on a downward trend, but the pace at which they are falling is a bit sluggish. "The drop has been somewhat slow relative to other large recessions," the economists wrote last week. "Initial jobless claims have fallen 18% in the 26 weeks since they peaked. In the same time span, jobless claims fell by 23% after the 1975 recession, 33% after the 1980 recession, and 29% after the 1982 recession. Claims are usually a good predictor of employment, and the slowness of their decline could indicate a sluggish recovery in the labor market."
From the early April peak of 658,750, jobless claims (four-week average) have fallen by 119,000 (-18%), and that measure of jobless claims has fallen in 20 out of the last 26 weeks. It's also interesting that in the WSJ article above, the Chase economists didn't mention the two most recent recessions of 1990-1991 and 2001. During those two recessions, jobless claims fell by a comparable amount, by -15% from the March 1991 peak and by -19% from the October 2001 peak (see bottom chart above).
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Read that carefully. This week's totals are a drop because they revised last week's numbers UPWARD!
The "seasonally adjusted" is the clue. These are not real numbers.
Looking back over history, the average is a LOT lower, under 300,000 most of the time.
Hence my "bumping along the bottom" litany. It appears that the recession is ending, and the V shape of the various negative results (like unemployment) are now flattening out, but the downward trend in unemployment claims continues, and we certainly are not seeing that number reverse with new job creation.
The irony of the pleasant face put upon this bad news is wearing thin.
On Oct 08 02:58 PM 4rdvark wrote:
> The red line seams to suggest that losing 520,000 jobs is employment
> stability. Let the stagflation apologetics begin!
"It's also interesting that in the WSJ article above, the Chase economists didn't mention the two most recent recessions of 1990-1991 and 2001. During those two recessions, jobless claims fell by a comparable amount, by -15% from the March 1991 peak and by -19% from the October 2001 peak"
Funny it also does not mention that the current level is HIGHER than the peak of those two recessions. So please do tell how is this such market rally earthshaking great news?
I hate to sound so pessimistic but just got back from California and it is an unmitigated disaster out there. Foreclosures are NOT abating, commercial real estate is in the tank and tanking. Businesses are closing/shutting down layoff are continuing.
I love this country but man is it f*up right now. I cannot believe what is going on. All of my customers say the same thing the banks are on their ass, taking their money and shrinking their lines of credit on them. People are scared and getting more scared.
This ain't new to bally-who. I think Concept Wizard has it right, claims are down right now because time has expired but what about the millions that have lost their jobs where are we right now 7 million?
This is nuts!
The situation is far from good. Since Mark Perry usually writes about "green shoots" in housing I'm going to explain a little reality he seems to be negelecting:1) is that joblessness comes on the heals of a housing downturn 2) that housing recovers BEFORE the jobs which trails it just barely.
Here is the problem housing isn't going to get better anytime soon, nor is the employment picture nor is the economy. They are all related and the are all fueled by one thing lending.Just got back from California where things are not getting better they are getting worse. Joblessness is 12% and growing. Businesses are "downsizing" they are shutting down. Foreclosures are not abating they are accelerating.
This might be a foreshadowing for the rest of the country. Unless some lending gets back in the picture.Housing cannot comeback until existing inventory is cleaned up. New homes are relatively zero in inventory something like 250K. Existing homes under 200K are non-existent. But what there is a huge over hang of- one which is going is houses over $415K. That is because scum bag bankers won't write anything that is not FHA.You could be a dual income family (a doctor and a lawyer each making $150K so combined $300K) and you could not get a JUMBO or other non conforming loan. That's nuts.There is so much inventory out there in that $415K and above its silly. Plus more houses are coming on the market.
Joblessness and housing, go hand in hand. Housing leads it down and housing leads it up. Housing cannot lead it up because of scumbag bankers. So, the economy cannot improve, so sleazy bankers start demanding their lines of credit from small business which exasperates the problem but creating more joblessness. Those small businesses then are forced to reduce inventories, the inventory is gone he has already downsized hoping the recovery would be hear but you know what- it never came. Now he's running out of money. He's burning the revenues from selling his inventory to keep whatever employees he can on but he can't by product to replenish inventories because the bank zapped his line. Now he is forced to close his business liquidate what ever inventory he has (hurting the companies he competes against) and the negative cycle starts again with the business down the street.Now which BLOODY idiot in this government didn't go to econ101.
Folks we are on the eve of 2010. This mess started "officially" in December of 2007. People are getting broken- this isn't just tesing people mantle, it isn't just a little thing people are getting broken. Unless lending by s*&tbrid bankers starts again and I mean f*&ng today. We've got real problems beyond fixing.
I hear in Cali there is a proposal to fire 50% of all State workers (just and idea) well considering in this country- if we follow Cali into this mess- that 30% of the work force works for State, County, Federal or muni you could see unemployment hit the same kind of numbers we saw in the great depression.
Then what?
"Claims are usually a good predictor of employment, and the slowness of their decline could indicate a sluggish recovery in the labor market."
"COULD"
HAHAHAHAHAHAHAHAHAHA
Which is the bigger joke?
The post or the quote?
On Oct 08 04:13 PM HardwoodFlooring wrote:
> This is a joke- this post that is. Blacksilver has it right. What's
> going on that is different this time these people are being "layed"
> off they are being permanently displaced. The businesses are closing
> all over the place. With dumb ass regional bankers standing on businesses
> and strangling them to death there is no hope of a recovery. Lending
> is not returning and will not return. The companies that have not
> been able to hold on will not be able to come back because there
> will not be any financing opportunities for them.
>
> I hate to sound so pessimistic but just got back from California
> and it is an unmitigated disaster out there. Foreclosures are NOT
> abating, commercial real estate is in the tank and tanking. Businesses
> are closing/shutting down layoff are continuing.
>
> I love this country but man is it f*up right now. I cannot believe
> what is going on. All of my customers say the same thing the banks
> are on their ass, taking their money and shrinking their lines of
> credit on them. People are scared and getting more scared.
>
> This ain't new to bally-who. I think Concept Wizard has it right,
> claims are down right now because time has expired but what about
> the millions that have lost their jobs where are we right now 7 million?
>
>
> This is nuts!
The government likes to herald the end of the recesion, but they often fail to state that any meaningful recovery is still a ways off. Only recently has the Federal Reserve mentioned that they expect unemployment to remain over 9% throughout 2010. The reprucussions of a persistant stagnant labor force is something to contend with both economically as well as socially. At this rate a W is almost inevitable given a multi-year lingering downturn.
In the meantime, enjoy the Federal Reserve and government induced commodities and equities bubble and try not to think about the dollar devaluation it implies. Perhaps then you can enjoy this upcoming holiday season.
You say: "....that measure of jobless claims has fallen in 20 out of the last 26 weeks" Excuse me. The number of jobless claims has climbed ever higher. Only the number of NEW claims has actually fallen.
It's kinda like falling from an airplane without a parachute. At some point, the increase in your speed will decline. That does not mean that you're no longer falling. It doesn't even mean you've slowed down.
This guy is best buddies with Larry Krudlow (seriously he is) and the other SA contributor Calafia Beach Pundit.
What do we know about these guys?
They are more wealthy than the majority of SA readers and average Americans will ever be. They have absolutely no worries whatsoever about their lives and the future of their families. They are part of the elitist group who sit back and laugh at the struggles of average Americans and who can "rationalize" all bad news as good news.
They write these articles simply so they can call each other up on the phone and pat each other on the back.
They have no concept, nor any relation whatsoever to the plight of average Americans. To them, average Americans are nothing more than a statistic they can use in an article to further their professional elitist career or get mentioned on Larry Krudlow's show.
Period.
compdivplan.com
> Anybody consider our fighting in Iraq is costing us 1 million jobs
> here....
and about $1 trillion all up in unnecessary Govt expenditure.
Not sure what was on the positive side of the balance sheet from invading Iraq, but a trillion less of Govt debt right now would be useful.
next week in jobless claims
On Oct 08 01:43 PM Rack wrote:
>
>
> Read that carefully. This week's totals are a drop because they revised
> last week's numbers UPWARD!
>
> The "seasonally adjusted" is the clue. These are not real numbers.
No need to add to the genuinely insightful remarks of those OTHER than the author.
By the way Nick are you going to follow me around as you do others like Jeff Nielson? Or others who are not falling for the garbage being shoveled by our FED/ Treasury/ and gov't?
You perma-bulls, who desperately "need" stocks to keep going up make me laugh.
<<YOUR A SIMPLETON THROUGH AND THROUGH!
Nick KrahS>>
As a matter of fact, yes they are. They are part of the propaganda machine that works overtime to keep the average American rationalizing bad news as good news.
Do you really think that when average Americans (lets not include us) lost over 50% or more of their net worth in the past 16 months, that these guys lost as much?
Or that these guys have less than multiple seven figures sitting in a bank somewhere from the high powered jobs they made have had, while the average American is flat broke looking forward to social security and a cardboard box living quarters for retirement?
Wake up man, these people are part of the elitist group that truly owns this country and whose goal it is to lie and pump the stock market regardless if it goes to zero.
<<You are obliviously a very bitter man! I can sense it from your profile. Did Wall Street Pass you up for a big job or something?>>
Really?
Oh my, you have me and everyone on here completely figured out now. Oh please stop. I am not going to get into some non-sensical debate about what you "think" you know about me, like you do with many others on here.
Never applied for a job on Wall Street though, just to put your mind at ease. Please, save your non-sense for others you like to harass on here.