Unemployment Claims: Watch the Distortions

The unemployment claim release looked good. Here's the headline:

In the week ending Oct. 31, the advance figure for seasonally adjusted initial claims was 512,000, a decrease of 20,000 from the previous week's revised figure of 532,000.

Sounds good, right? So does this:

The advance number for seasonally adjusted insured unemployment during the week ending Oct. 24 was 5,749,000, a decrease of 68,000 from the preceding week's revised level of 5,817,000.

Now let's talk truth:

The advance number of actual initial claims under state programs, unadjusted, totaled 480,178 in the week ending Oct. 31, a decrease of 14,216 from the previous week. There were 466,341 initial claims in the comparable week in 2008.

The rate of firing is higher than it was this week last year - a really, really bad time, if you remember. This was immediately post-Lehman and AIG, when firms were shedding employees like water off a duck's back.

So why the disconnect?

States reported 3,459,148 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending Oct. 17, an increase of 90,239 from the prior week.

68,000 people came off the rolls and found jobs, right?

Wrong.

90,239 fell off the government's "official statistics" and rolled into "extended programs." That means that net-on-net the picture got worse by 22,239.

It gets even better than this, however, as we are now far enough into the mess that people are rolling off even the extended benefit programs in many states! There is no current tabulation of that count, but any number greater than zero simply adds to the malaise.

The bottom line:

• Unemployment continues to get worse, not better. The "official" numbers used for the headline don't count you once you "roll off" the original unemployment program - "extended benefits" and those who have rolled off even the extended programs are not counted as "continuing claims."
  
• More people were fired the last week of October this year than were fired the last week of October last year, and last year was directly in the blast zone from Lehman and AIG.

You want to cheer these numbers?

The market might, but Main Street, where most of us live (myself included) has a somewhat different view.

Comments

[Donald Ingram:]

Kudos Karl! As usual the math does not lie.
And as usual we can count on the propaganda machine to spin out more "feel good". Unfortunately the machine realises that the vast majority do not pay any attention to the numbers underlying the lies, preferring instead to take the spoon fed bull offered up.

Nov 05 12:32 PM

[market ace:]

Oh no I just hate it when the truth comes out and ruins the party. Well actually I guess it did not ruin the party as Wall Street drinks the phony Gov't kool-aide and ignores reality.

Wait until tomorrows phony jobs numbers come out and Wall Street eats that up too. Washington throwing a trillion dollars out there has managed to slow the decline, but even that amount can not create job growth as it is all being used for unsustainable programs.

Nov 05 12:36 PM

[OilFinder:]

"The advance number of actual initial claims under state programs, unadjusted, totaled 480,178 . . ."

Nice way to mislead, Karl. Notice to readers: He is citing the UNADJUSTED number. Any good economic statistian knows there are seasonal variations in employment and other economic indicators which need to be taken into account for, otherwise you will get rises and falls which don't really reflect underlying economic conditions. By ignoring this fact and continuing to cite the UNADJUSTED numbers you are misleading your readers.

Nov 05 02:04 PM

[Papaswamp:]

Yea 520,000 unemployed is a much nicer number than 480,178 unemployed.....


Its the continuing unemployed that is the key or perhaps the 8.9% INCREASE in bankruptcies this month over last month. I think the raw numbers (even though those are surveyed and not actual head count) is a better indicator.

Employment numbers for the year..
Month Monthly Filings Month Unempl. Pct. Of Filing
Jan ….. 3,758,055 ….. 508,000 ….. 13.5%
Feb ….. 2,581,598 ….. 851,000 ….. 33.0%
Mar ….. 2,443,195 ….. 694,000 ….. 28.4%
Apr ….. 2,411,093 ….. 563,000 ….. 23.4%
May ….. 2,687,527 ….. 787,000 ….. 29.3%
Jun ….. 2,267,933 ….. 218,000 ….. 9.6%
Jul ….. 2,349,590 ….. (267,000) ….. -11.4%
Aug ….. 2,321,221 ….. 466,000 ….. 20.1%
Sep ….. 1,761,830 ….. 263,000 ….. 14.9%
Oct ….. 2,396,615

YTD Totals 24,978,657 ---- (NSA) unemployed...that is 24 MILLION people out. ( 9 million on extended benefits...an increase this WEEK of +136,000.


On Nov 05 02:04 PM OilFinder wrote:

> "The advance number of actual initial claims under state programs,
> unadjusted, totaled 480,178 . . ."
>
> Nice way to mislead, Karl. Notice to readers: He is citing the UNADJUSTED
> number. Any good economic statistian knows there are seasonal variations
> in employment and other economic indicators which need to be taken
> into account for, otherwise you will get rises and falls which don't
> really reflect underlying economic conditions. By ignoring this fact
> and continuing to cite the UNADJUSTED numbers you are misleading
> your readers.

Nov 05 03:20 PM

[User 353732:]

First, the Govt turns people into numbers
Then, it erases the numbers
Finally, it erases the people
This is called a "V" recovery accelerating into a boom.

All is well in the Soviet of America and every day, in every, way getting better and better, because the WashDc-Wall St Politburo says so. The People's Press applauds.

The Govt has the statistics to prove that jobs are being "created and saved" at rates never before achieved in planetary history. Soon it will have the statistics to prove that there is full employment.

Statistics never lie. Only Middle Class social deviants and enemies of the Soviet question statistics. This is why, soon, the Middle Class will be excluded from all metrics of employment, income, and wealth. This will make the statistics even purer and truer and the Soviet of America a true worker's paradise.

Nov 05 04:16 PM

[Zell:]

The small business owners, and sub contractors who file as self employed, with a Schedule C or even as a S-Corp are also excluded from this number.

Nov 05 07:53 PM

[MarketGuy:]

Thank you Karl, great work.

Let's not forget the "prior month adjustments" that on high average get raised. Hmmm, coincidence. nope, just "Wall Street/D.C. Math" at work again.

Nov 05 09:01 PM

[FB5000:]

Klown, step away from the computer. Please stop; you are embarrassing yourself. It is pretty clear you don't know what you are doing. You need a new hobby or get a job working at Fox News.

Yes. The data is worth cheering. That's easy. You are wrong on that.

You are misleading. But I don't think you do it intentionally. You just don't really understand.

Comparing 10/08 to 10/09 is interesting. But even you should see that pretty soon - probably about now these "comps" show "improvement". We are still focused on the second derivative so the comparison you are using is meaningless. The more interesting data is the rate of change month to month. 9/09 to 10/09 vs. 9/08 to 10/08. You seem to like numbers. You should have fun with that.

Unemployment will continue to rise but recovery is here and accelerating. Don't believe me? Watch and see.

That's all.

Nov 05 09:17 PM

[ebworthen:]

FB5000 - Part of me hopes you are right and part of me doesn't.

I don't want to see another collapse and people on the streets and riots and civil unrest.

On the other hand, I don't want a "recovery" on the backs of the average American. I don't want a booming market now that will cost future generations. Where does unethical and immoral behavior end? It ends in very bad places like depressions and wars.

Leveraging the banks and markets with future obligations and printed money at 0% works in opposition to investments made in productive endeavors that benefit society.

Leveraging our children's future in pursuit of mammon today is avaricious, gluttonous, and lustful.

Nov 05 09:33 PM

[BRUCE E. W.:]

The bottom 80% is not only suffering the unemployment but savings are dwindling, debt is up, forclosures and individual bankcruptcies are accellerating while the big money gets to buyout all these asset losses in stride. Meanwhile the upper tiers of the economy (micro & macro) are floating price structures against speculations into another counterbalancing set of spirals (the race upward seems to be equal to the race to the bottom). While the finance at the top is expanding the lower half is contracting into an austerity trap.
Thanks for the truth in spending eye opener, it seems most of the "virtual reality of news" these days is meant to sway the market sentiments from feel good to fearful doom and back again like the wind to suit the market makers' bosses.

Nov 06 09:58 AM

[TCK:]

When Bush was President the unemployment rate was 6% and MSM told us that it was the worst economy in 50 years.

Today the rate is over 10% ( and rising ) and MSM tells us we are in recovery.

Brilliant !

Nov 06 10:10 AM

[User 494952:]

I guess you just cannot help yourself. Your attempts at being a superior brain and wit fail. If you disagree just say so and explain why. The rude attempts just turn people off to your point of view. I do not always agree with KD and he can sometimes also be a rude jerk, but he ALWAYS explains his thesis. If you are so smart compete with him, don't be an ass. Tired of the BS


On Nov 05 09:17 PM FB5000 wrote:

> Klown, step away from the computer. Please stop; you are embarrassing
> yourself. It is pretty clear you don't know what you are doing. You
> need a new hobby or get a job working at Fox News.
>
> Yes. The data is worth cheering. That's easy. You are wrong on that.
>
>
> You are misleading. But I don't think you do it intentionally. You
> just don't really understand.
>
> Comparing 10/08 to 10/09 is interesting. But even you should see
> that pretty soon - probably about now these "comps" show "improvement".
> We are still focused on the second derivative so the comparison you
> are using is meaningless. The more interesting data is the rate of
> change month to month. 9/09 to 10/09 vs. 9/08 to 10/08. You seem
> to like numbers. You should have fun with that.
>
> Unemployment will continue to rise but recovery is here and accelerating.
> Don't believe me? Watch and see.
>
> That's all.

Nov 06 10:16 AM

[neontyper:]

Obama - chains you can bereave in

It's really sad though. Think about it, we are communist/socilaist now and there is nothing we can do about it. Has anything we have done as of late worked? No. The beast is beyond anything we throw at it, it's a multi-trillion dollar international conglomerate that a wage slave like you and me are stuck in no matter what. Modern day slavery, with a higher standard of living than true slavery was.

True bloodshed in the streets can and will stop it. Anything short of that is a waste of time. Guns N Butter...

Nov 06 12:17 PM

[TeresaE:]

We import nearly 150,000 FOREIGNERS a month that are getting jobs. Jobs that are not available to Americans trying to pay education and other debt. The H1-B visa program is rife with corruption and fraud. Huge contract houses have sprung up making their buck off lower paid workers from other countries.

Congress is getting ready to raise the limit AGAIN. While millions of your fellow citizens become poor, complacent and on the government dole (YOUR back).

And we crow about recovery. Good luck with that.

Thanks for keeping on Karl.

Nov 06 12:34 PM

[Sluggo:]

OilFinder:
Karl is comparing initial unadjusted claims last week to the initial unadjusted claims of the same week one year ago:

"The advance number of actual initial claims under state programs, unadjusted, totaled 480,178 in the week ending Oct. 31, a decrease of 14,216 from the previous week. There were 466,341 initial claims in the comparable week in 2008"

Nothing wrong with that!! Read and comprehend before you comment.


On Nov 05 02:04 PM OilFinder wrote:

> "The advance number of actual initial claims under state programs,
> unadjusted, totaled 480,178 . . ."
>
> Nice way to mislead, Karl. Notice to readers: He is citing the UNADJUSTED
> number. Any good economic statistian knows there are seasonal variations
> in employment and other economic indicators which need to be taken
> into account for, otherwise you will get rises and falls which don't
> really reflect underlying economic conditions. By ignoring this fact
> and continuing to cite the UNADJUSTED numbers you are misleading
> your readers.

Nov 06 03:21 PM

[FB5000:]

Ofcourse I'm right. Do you really believe that we haven't been here before. This nonsense politically motivated analysis is off base. Klowns with agendas have been predicitng the end of this or that for a long time. Don't fall for it. Use your brain and your eyes. Not every piece of data will point in the same direction all the time - recovery does not work that way - but on balance things are improving and will continue to do so.


On Nov 05 09:33 PM ebworthen wrote:

> FB5000 - Part of me hopes you are right and part of me doesn't.<br/>
>
> I don't want to see another collapse and people on the streets and
> riots and civil unrest.
>
> On the other hand, I don't want a "recovery" on the backs of the
> average American. I don't want a booming market now that will cost
> future generations. Where does unethical and immoral behavior end?
> It ends in very bad places like depressions and wars.
>
> Leveraging the banks and markets with future obligations and printed
> money at 0% works in opposition to investments made in productive
> endeavors that benefit society.
>
> Leveraging our children's future in pursuit of mammon today is avaricious,
> gluttonous, and lustful.

Nov 07 07:31 PM

[FB5000:]

Take a look at my posted comments champ. You will see that 80% of what I say has unfolded as I said it would.

As a public servicce I also have posted nuggets of data and analysis from time to time.

Unlike the Klown I have a real job, real hobbies and a life. and I am not in th ehabit of giving up stuff for free.

Klow's writings are free and as I have said elsewhere highly valuable to me as an indicator. You see data is all around you - you just need to know how to find it and use your brain. I read and follow Klown because I am using him as a leading indicator. The minute he turns positive that will signal the top is close.

I am calling it the Klown indicator. I also regularly scan the comments. The tone is turning slightly more positive. I will keep monitoring. you can do the same. I bet that once comments are >60% positive we will be at or near top

Employment payrolls are also good for that as are some others.

That's all.


On Nov 06 10:16 AM User 494952 wrote:

> I guess you just cannot help yourself. Your attempts at being a superior
> brain and wit fail. If you disagree just say so and explain why.
> The rude attempts just turn people off to your point of view. I do
> not always agree with KD and he can sometimes also be a rude jerk,
> but he ALWAYS explains his thesis. If you are so smart compete with
> him, don't be an ass. Tired of the BS

Nov 07 07:39 PM