If you follow business media, you were probably enthused this week to hear that jobless claims had improved based on the latest Department of Labor report. In fact, you might even have attributed the stock market’s later bounce to it. But you would be wrong. Alas, this is why I am here… to make sense of it all for you.
Big deal! Weekly Jobless Claims improved by 7,000 in the period ending August 6, but they were still up near 400K, at 395K to be exact. The four-week moving average of weekly jobless claims illustrates the general malaise in the labor market, improving by just 3,250, to 405,000. Hey, the insured unemployment rate improved by a tenth of a percentage point, to 2.9% in the period ending July 30! Sit back down now; we’re not chilling the champagne just yet.
Don’t think I have not noticed, though, that the number of people receiving benefits continues to decrease. The pool of the insured unemployed shed 60K in the latest check-up, and the number of people receiving a benefit of some sort, including extension benefits, dropped 89,945 in moving to 7.48 million.
The problem is that I suspect people are simply losing their benefits, more so than finding work. This is how it goes in the government benefits game. There are a million rules set up to inspire the unemployed to keep seeking work, versus bumming around collecting free money. What happens all too often instead though is that people, being human, get tripped up by the net of government rules and regulations. The unforgiving “system” then throws them out on the street without a dime nor dignity. So, they fall out of the government count, presenting illusion of improvement where an even more indignant state exists than the previous. What will be end result of all this, if not the kind of riots and protests that we see occurring today in the United Kingdom and Greece?
State data details
The highest insured unemployment rates in the week ending July 23, were in Puerto Rico (5.5), Pennsylvania (4.2), New Jersey (4.1), Alaska (3.9) California (3.9), Connecticut (3.8), Oregon (3.8), Rhode Island (3.7), Nevada (3.6) and Arizona (3.4).
The largest increases in initial claims for the week ending July 30, were in Minnesota (+472), Kentucky (+393), New Jersey (+291), Delaware (+64), and Vermont (+50) while the largest decreases were in Tennessee (-4,448), Michigan (-3,025), Florida (-2,336), New York (-2,132), and Texas (-1,828 ).
Extended benefits were available in Alabama, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Washington, West Virginia, and Wisconsin during the week ending July 23.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.