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There’s trouble brewing, as seen in the weekly jobs data from the Department of Labor (DOL). Weeks ago, we warned that in such a sensitive labor environment this economic metric might be a leading indicator of recession. Unfortunately, the latest data seem to support our concerns. And, the number of folks receiving benefits is on the decline, making for a bad moon rising of potential civil concern. If politicians continue to prioritize selfish individual and party goals, and do not change the tone of politics to one of unity and progression for the nation’s sake, they risk sending this crisis into a new and more dangerous phase.

The DOL reported Weekly Jobless Claims for the week ending September 10, increased by 11,000, to 428K. Last week’s estimate was revised higher, to 417K, from 414K. As usual, economists held close to the prior week result in their forecasting for this week, and so a consensus estimate of 412K was off. The trend is clear here now, with the four-week moving average up to 419,500, up 4K this week alone.

As in previous data, the number of insured unemployed decreases more often than it rises of late. In my estimation, this is not the result of improving employment, but because of other issues. Firstly, the long-term unemployed are outlasting their extended unemployment insurance benefits. Secondly, red tape and tight regulation at the street level are likely leading struggling Americans to fall out of qualification for the benefits they are so dependent upon. The government even dares to audit these people and ask for money back, while keeping tax breaks for the richest Americans in place. And thirdly, some folks are finding whatever work they can and leaving their only slightly less valuable benefits behind. My ventures into Harlem and my work with the poor have shown these things to be true.

The insured unemployment rate stuck at 3.0% this last week, but the number decreased by 12K. Of those people receiving a benefit of some sort, including unemployment insurance extensions, the number fell by 25,033, to 7.1 million Americans in the August 27, period. On the surface, this looks like good news, but we know better.

Extended benefits were still 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 August 27. However, how many Americans are nearing their weeks of unemployment limit, which can help prevent such things as foreclosure, welfare, homelessness and civil unrest?

If we do not either get these long-term unemployed Americans back to work, or keep the money flowing to them, we may face increasing likelihood of civil unrest, especially heading into the election season. The unsettling events that are occurring overseas in nations with higher unemployment and longer sitting indigestion, are nearing the realm of possibility in the U.S. as well now. Distaste for Washington is mutating into pure hatred, and what has happened on the fringe, acts of “insanity” by unstable individuals, could then become possible for stable but financially troubled people.

We need to cure this thing today, and politics must change tone to a more progressive message of national unity. Any politician with a true love for his country would prioritize his country now. The tone of political debate must remain civil and the language must be responsibly chosen. Recent words by good men, but poorly chosen, like from union leader James Hoffa over Labor Day, not to mention fringe Tea Party fire-starters, are dangerous.

As always, I like to provide readers with the data from the most troubled states:

The highest insured unemployment rates in the week ending August 27, were in Puerto Rico (4.4), Pennsylvania (4.2), New Jersey (4.0), California (3.7), Connecticut (3.7), Oregon (3.5), Rhode Island (3.5), Nevada (3.4), Alaska (3.3),and New York (3.2).

The largest increases in initial claims for the week ending September 3, were in Kansas (+1,969), North Carolina (+1,450), Washington (+1,443), New Jersey (+1,324), and Texas (+1,239), while the largest decreases were in New York (-2,854), South Carolina (-2,118), Puerto Rico (-1,611), California (-576), and Virginia (-216).

The stocks of employment related firms and business services are generally higher today due to their sensitivity to the economy, and given the positive news out of Europe, which has the Dow also higher by 1.6%.

Movement of Labor & Business Services Stocks

Robert Half (NYSE: RHI)

2.1%

Korn Ferry (NYSE: KFY)

1.5%

Monster Worldwide (NYSE: MWW)

2.1%

Manpower (NYSE: MAN)

3.5%

51Job Inc. (Nasdaq: JOBS)

2.1%

Paychex (Nasdaq: PAYX)

3.0%

Kforce (Nasdaq: KFRC)

Unch.

TrueBlue (NYSE: TBI)

1.3%

Dice Holdings (NYSE: DHX)

4.4%

Kelly Services (Nasdaq: KELYA)

1.7%

CDI Corp. (NYSE: CDI)

-0.6%

Cross Country Healthcare (Nasdaq: CCRN)

3.7%

On Assignment (Nasdaq: ASGN)

1.1%

AMN Healthcare Services (NYSE: AHS)

1.4%

Barrett Business Services (Nasdaq: BBSI)

1.4%

Hudson Highland Group (Nasdaq: HHGP)

2.0%

StarTek (NYSE: SRT)

0.6%

RCM Technologies (Nasdaq: RCMT)

1.7%

VirtualScopics (Nasdaq: VSCP)

-0.8%

American Surgical (OTC: ASRG.OB)

Unch.

Medical Connections (OTC: MCTH.OB)

Unch.

iGen Networks (OTC: IGEN.OB)

Unch.

St. Joseph (OTC: STJO.OB)

-8.9%

General Employment Enterprises (NYSE: JOB)

-6.9%

Total Neutraceutical (OTC: TNUS.OB)

Unch.

TeamStaff (Nasdaq: TSTF)

0.5%

Stratum (OTC: STTH.PK)

Unch.

Purespectrum (OTC: PSRU.PK)

Unch.

Corporate Resource Services (OTC: CRRS.OB)

29%

Prices at approximately 3:00 PM EDT

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Labor Trouble Is Brewing