Initial Jobless Claims Rise… Unexpectedly… Again

Here we go again, another week and another, um, “unexpected” rise in initial jobless claims:

The number of new claims for unemployment benefits jumped unexpectedly last week as heavy snows caused layoffs to rise.

In addition, many state agencies in the mid-Atlantic and New England regions that process the claims were closed due to the storms and are now clearing out backlogs, a Labor Department analyst said.

The department said Thursday that first-time claims for unemployment insurance rose by 22,000 to a seasonally adjusted 496,000. Wall Street analysts polled by Thomson Reuters expected a drop to 455,000.

Bad weather can cause job losses in construction and other industries sensitive to weather.

I’m sorry but I have to ask… Unexpectedly by whom???

JWF sums things up nicely:

It’s comical how every story about job losses always calls it unexpected, with pointy-headed experts baffled by the news. Maybe someone can ask Professor Obama about this grim news today during his six-hour lecture to Republicans.

Um, yeah, I’d pay money to see that!

Anyway, it’s not the weather that’s driving these new jobless claims it’s the slumping consumer confidence and  home prices coupled with the Millions of Americans who are underwater on their mortgages… roughly 300,000 of them are facing foreclosure each month. Americans simply don’t have the discretionary capital to invest or consume they they used to. Bottom line we’re not going to see anything resembling a meaningful recovery until that changes.

Related

• US Jan mass layoffs edge up on weak manufacturing – Reuters
• Read His Lips: Obama Calls for Increasing Payroll Taxes on ‘Households’ Earning Less Than $250,000 Per Year – CNSNews.com
• Obama May Prohibit Home-Loan Foreclosures Without HAMP Review – Bloomberg.com

New Jobless Claims Rise… Unexpectedly… Again…

Here we go again… another week, another “unexpected” rise in new jobless claims:

The number of U.S. workers filing new applications for unemployment insurance unexpectedly surged last week, while producer prices increased sharply in January, raising potential hurdles for the economic recovery.

Initial claims for state unemployment benefits increased 31,000 to 473,000, the Labor Department said on Thursday. That compared to market expectations for 430,000.

Another report from the department showed prices paid at the farm and factory gate rose a faster than expected 1.4 percent from December after a 0.4 percent gain in December, as higher gasoline prices and unusually cold temperatures helped boost energy costs.

To be honest I’m more concerned the sharp rise in producer prices than I am about the increase in new unemployment claims. In short, inflation is starting to rear its ugly head; frankly I think we’re head for a dead cat bounce rather than a recovery. What say you?

Related

• Fed Raises Discount Rate Quarter Percentage Point – Wall Street Journal
• U.S. stock futures fall as economic data disappoints – MarketWatch.com
• Jobless Claims in U.S. Rose Last Week to 473,000 – Bloomberg.com
• Leading Economic Index in U.S. Increased 0.3% in January – Bloomberg.com
• Obama ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases – Business Week
• Dear Mr. President: Why We Are Not Hiring – C. Edmund Wright, American Thinker

Unemployment Rate Drops to 9.7%

I was going to post this yesterday, but there was something about the numbers that just didn’t make sense to me so I decided to hold off until I could dig through the report.

Anyway, the Associated Press got to use it’s favorite adverb, “unexpectedly“, again today:

The job market is lurching toward improvement. It just has a long way to go.

The outlook for jobs became a bit less bleak Friday when the government released January’s unemployment rate showing an unexpected decline from 10 percent to 9.7 percent. It was the first drop in seven months.

Still, the government now estimates 8.4 million jobs vanished in the Great Recession. And economists say the nation will be lucky to get back 1.5 million of them this year. They also warn it will take until the middle of the decade for the job market to return to normal.

The economy is growing, and normally job creation would be strengthening. But the job market is weighed down by employers who remain slow to hire because consumers are not spending enough. Companies worry about their prospects once government stimulus aid fades. They also fret about possibly higher costs related to taxes or health care measures from Congress and statehouses.

Heh, I hate to break this to you folks at the AP, but this wasn’t unexpected if you’ve been watching the trends over the last couple of months it was foregone conclusion that the unemployment rate hold steady or decline.

Why? For starters lets take a look at Table A-12 in the Household Survey, the number of long term unemployed, that is those who have been unemployed for 27 weeks or longer, has been rising steadily for the last several months. For statistical reasons those people are no longer considered part of the workforce.

Second take a look at Table B-1 in the Establishment Survey, the total number of jobs in the marketplace has dropped sharply from roughly 133 million in January 2009 to an estimated 129 million in January 2010… In fact if we look at the historical data the drop is even sharper… From 137 million in January 2008.

Bottom line the decline in unemployment is the result of statistical manipulation not real job growth. In short if fewer jobs in the marketplace means you’re naturally going to have a lower percentage of those unemployed.

First-time Jobless Claims Rise Unexpectedly… Again

This is getting ridiculous, and as predictable as sunrise… Just how many times can new jobless claims rise “unexpectedly” before the Associated Press realizes there’s nothing unexpected about it:

The number of newly laid-off workers filing initial claims for jobless benefits rose unexpectedly last week, evidence that layoffs are continuing and jobs remain scarce.

The rise is the fourth in the past five weeks. Most economists hoped that claims would resume a downward trend that was evident in the fall and early winter.

The Labor Department said Thursday that new claims for unemployment insurance rose by 8,000 to a seasonally adjusted 480,000. Wall Street economists had expected a drop to 460,000, according to Thomson Reuters.

The four-week average, which smooths fluctuations, rose for the third straight week to 468,750.

The figure is the highest in the past two months. Initial claims dropped sharply in late December, raising hopes among economists that layoffs were nearing an end and the economy would soon start generating net gains in jobs.

When you couple this report with yesterday’s news that planned layoffs have begun increasing again things don’t bode well for this so called recovery… Of course if tomorrow’s announcement from the Bureau of Labor Statistics about unemployment and job creation for January turns out to be bad news, the media will undoubtedly call it “unexpected”.

Related

• Stocks, Commodities Plunge, Dollar Gains on Debt, Jobs Concerns – Bloomberg.com
• House approves $1.9 trillion more debt – The Washington Times
• Companies boost productivity and put off hiring – Investors.com

Train Wreck: Retail Sales Fall, Jobless Claims Rise, Foreclosures set Record and the Dollar Crisis

Whew, I can’t believe I got all that in headline!

Anyone who has read this blog for any period of time knows I’m a pessimist on the economy, in short I don’t see any reason to be hopeful:

Retail sales unexpectedly fell in December, leaving 2009 with the biggest yearly drop on record and highlighting the formidable hurdles facing the economy as it struggles to recover from the deepest recession in seven decades.

In another disappointing economic report, the number of newly laid-off workers requesting unemployment benefits rose more than expected last week as jobs remain scarce.

Still, many economists, puzzled by the retail sales decline that follows reports from retailers of brighter holidays, cautioned that the December figures don’t necessarily signal a big consumer pullback and could be a blip.

Right, retail sales fell 0.3 percent in December, overall sales for 2009 fell 6.2 the sharpest decline on government records going back to 1992.

On the jobs front, the Labor Department reports that new claims for unemployment insurance rose by 11,000 to a seasonally adjusted 444,000, sharply higher than the 3,000 new claims forecast by economists.

Add to that a record number of foreclosures:

A record 2.8 million households were threatened with foreclosure last year, and that number is expected to rise this year as more unemployed and cash-strapped homeowners fall behind on their mortgages.

The number of households that received a foreclosure-related notice rose 21 percent from 2008, RealtyTrac Inc. reported Thursday. One in 45 homes were sent a filing, which includes default notices, scheduled foreclosure auctions and bank repossessions.

In December, more than 349,000 households, or one in 366 homes, were hit with a foreclosure-related notice. That represents a 14 percent spike from November and a 15 percent jump from December 2008.

Banks repossessed more than 92,000 homes, up 19 percent from November. That increase was likely due to lenders working to clear their books at the end of the year, RealtyTrac said.

And the looming dollar crisis:

The United States must soon raise taxes or cut government spending to curb its debt, and failure to act will risk a crippling dollar crisis as investor confidence ebbs, a panel of experts said on Wednesday.

“It has got to be done. It will be done some day. It may be done with enormous pain. Or it may be done more rationally,” said Rudolph Penner, a former head of the nonpartisan Congressional Budget office who co-chaired the 24-strong Committee on the Fiscal Future of the United States.

President Barack Obama’s administration will present his budget for fiscal 2011 early next month amid intense pressure to live up to election campaign promises not to raise taxes on middle class Americans, while confronting a record deficit.

As a result, Obama is expected to focus on long-term fiscal discipline, while maintaining policy support for an economic recovery in the near-term as the country rebuilds after its worst recession since the Great Depression.

And you can understand why I’m pessimistic about the chances for a meaningful economic recovery anytime soon. I’m sure there’s reasons for optimism, but I can’t find them. Everything I seen is pointing towards 1970s style stagnation.

December Unemployment Holds Steady at 10 Percent

I’m looking for good news in the December Jobs Report, but I can’t find any…

From Reuters:

U.S. employers cut 85,000 jobs in December, confounding expectations the labor market was finally stabilizing and piling pressure on President Barack Obama to spur job growth.

Unemployment, which held steady at 10 percent, remains the Achilles heel of the economy’s recovery from its worst recession in 70 years. Creating jobs is critical to sustaining the recovery when government stimulus fades.

November payrolls were revised to show the economy actually added 4,000 jobs rather than losing 11,000, as initially reported, breaking a streak of 22 consecutive monthly losses, the Labor Department’s report on Friday showed.

With revisions to October, however, the economy lost 1,000 more jobs than previously estimated over the October-November period and the stable unemployment rate in December reflected a surprisingly large number of discouraged jobseekers leaving the labor force.

December’s payrolls plunge was much worse than what economists had expected. Wall Street had forecast a flat reading and a tick up in the unemployment rate to 10.1 percent.

Payrolls fell in the manufacturing, construction and the service-providing sectors. Government employment also dipped.

Still, analysts said the data suggested a broad trend toward a labor market recovery was intact.

Intact??? Not hardly, if it hadn’t been for another 600,000 plus workers dropping out of workforce, unemployment rate would have been 10.4 percent. In other words the unemployment rate dropped because 600,000 plus people gave up looking for work and are no longer being counted as part of the workforce… it’s statistical hocus pocus not a labor market recovery. Take a look at the Bureau of Labor Statistics’ Alternative measures of labor underutilization table here… Two things standout first U-1 or Persons unemployed 15 weeks or longer, as a percent of the civilian labor force has increased in each of the last four months from a seasonally adjusted 5.5 percent in September to 5.9 percent in December. Second U-6 or the Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers climbed back up to 17.3 percent in December.

If there’s recovery, it’s a jobless one.

Related

• Payrolls fall by 85,000 after small gain in November – MarketWatch
• Shrinking U.S. Labor Force Keeps Unemployment Rate From Rising – Bloomberg
• Economy loses 85K jobs as employers remain wary – Associated Press
• 9 reasons why the Dec. jobs report is bad news for Dems – James Pethokoukis, Reuters
• State tax revenues continue to tank – Ed Morrissey, Hot Air

Ouch: Unemployment Climbs to 10.2%

Ouch, unemployment climbed to a 26 year high in October as as more than 558,000 Americans lost their jobs in October:

In another sign that workers are being left out of the budding economic recovery, the U.S. unemployment rate climbed to 10.2% in October, topping the 10% mark for the first time in 26 years.

Nonfarm payrolls dropped by a seasonally adjusted 190,000 in October, bringing to total number of jobs lost in the recession to 7.3 million, the Labor Department reported Friday. It was the 22nd straight monthly decline in payrolls.

Large losses were seen in manufacturing, construction and retai employment. Health care and temporary-help agencies added jobs. Read the full government report.

The October jobs report shows a growing disconnect between a recovery in economic output and continued job losses. The economy grew at a 3.2% annual rate in the third quarter, with productivity rising at a 9.5% rate.

“The grinding pace of progress in labor markets likely flags a tepid economic recovery,” wrote Sal Guatieri, an economist for BMO Capital Markets.

With unemployment remaining elevated and no sign of job growth, the Federal Reserve could be expected to keep its interest rate target at virtually zero, economists said. Read commentary on the Fed and jobs.

The jobs report was worse than expected. Economists surveyed by MarketWatch were forecasting a rise in the unemployment rate to 10%, with 150,000 lost payroll jobs. An upward revision to August and September payrolls cushioned some of the disappointment, however.

The current 10.2 percent unemployment rate is the highest since April 1993.

According to the Bureau of Labor Statistics 15.7 million Americans are unemployed, of those, 5.6 million, or 35.6% of the unemployed, have been out of work for more than six months… Representing another grim record. When you add in laid-off workers who have settled for part-time work or who have given up looking for work, the unemployment rate is 17.5 percent.

Regular readers know I’m a pessimist about the economy and I don’t anything in this month’s jobs report to change that… Jobs losses accelerated in manufacturing,  the average losses in the previous four months were 51,000 per month, but in October they climbed to 61,000 jobs lost.  Construction improved slightly loosing 62,000 jobs in October, down slightly from the 4-month average of 67,000. Finally, the retail sector lost 40,000 jobs last month – an indication that retailers are anticipating a weak a holiday season.

Unemployment Climbs to 9.8%

If there’s a silver lining in the September Jobs report I can’t find it:

U.S. employers cut a deeper-than-expected 263,000 jobs in September, lifting the unemployment rate to 9.8 percent, according to a government report on Friday that fueled fears the weak labor market could undermine economic recovery.

The Labor Department said the unemployment rate was the highest since June 1983 and payrolls had now dropped for 21 consecutive months.

Analysts polled by Reuters had expected non-farm payrolls to drop 180,000 in September and the unemployment rate to rise to 9.8 percent from 9.7 percent the prior month. The poll was conducted before reports, including regional manufacturing surveys, showed some deterioration in employment measures.

The government revised job losses for July and August to show 13,000 more jobs lost than previously reported. Preliminary annual benchmark revisions, released together with September’s employment report showed that total non-farm payroll employment for March would have to be revised down about 824,000.

There’s really no good news here… In previous months there have been little signs of hope but there aren’t any this month. Everything, hours worked, weekly wages etc. are head down. The only thing going up is unemployment. In fact the male unemployment rate at its highest level since the Great Depression!

Truth be told it’s worse than you think when you add in laid-off workers who have settled for part-time work or who have given up looking for work, the unemployment rate is 17 percent.

You see the raw data here.

Retail Sales Fall, Jobless Claims and Foreclosures Rise In July

Recovery, what recovery???

There’s no good news in the economic data released today… If President Obama and the Democrats in Congress where hoping improving economic indicators would help rescue their health care reform plans there out of luck.

Retail Sales fell 0.1 percent last month, while new jobless claims increased to a seasonally adjusted 558,000, from 554,000 the previous week and foreclosures rose 7 percent in July:

Retail sales disappointed in July and the number of newly laid-off workers filing claims for unemployment benefits rose unexpectedly last week. The latest government reports reinforced concerns about how quickly consumers will be able to contribute to a broad economic recovery.

“There is really no positive spin to put on these numbers,” Jennifer Lee, an economist with BMO Capital Markets, wrote in a research note. “The U.S. consumer remains very weak. The jobs situation, while slowly improving, is still dismal.”

The Commerce Department said Thursday that retail sales fell 0.1 percent last month. Economists had expected a gain of 0.7 percent.

France and Germany have both shown GDP growth in second quarter while the US economy declined an additional 1% in the same period.

I don’t see a lot of positive signs for the economy horizon, frankly, I think Ed Morrissey’s right, the radical policy agenda being pushed  by the Obama administration and Democrats in Congress is keeping a lot of capital sidelines. Investors aren’t going to jump into American markets while our political leadership is hell bent pushing radical, business-hostile legislation like cap and trade through Congress.

Related

• Auto inventories tight, U.S. “clunker” interest slips – Reuters
• Federal deficit higher in July, $1.27T this year – Associated Press

Unemployment Rate Falls to 9.4%… Sort of…

From Reuters:

The U.S. unemployment rate fell in July for the first time in 15 months as employers cut far fewer jobs than expected, providing the clearest sign yet that the economy was turning around.

Employers shed 247,000 jobs in July, the Labor Department said Friday, the least in any one month since last August, taking the unemployment rate to 9.4 percent, down from 9.5 percent in June.

“It suggests the recession will be ending before the end of the year. There isn’t any part of the economy that hasn’t shown some slowing in deterioration,” said Joe Davis, chief economist at Vanguard in Valley Forge, Pennsylvania.

Recent data ranging from home sales to manufacturing have pointed to an economy starting to dig itself out of one of the worst recessions since the Great Depression of the 1930s.

Don’t start celebrating yet folks, as Jim Geraghty and James Pethokoukis point out the devil is in the details:

Hmm. In June, the Bureau of Labor Statistics said the civilian labor force was 154,926,000 people.

In a work for of June’s number of 154,926,000, that’s an unemployment rate of 9.8 percent.

In July, 796,000 of those were taken out of their definition of the workforce, and thus their unemployment calculations for this month, because they have stopped looking for work “because they believe no jobs are available for them.” Ten percent of the June workforce would be 15.4 million, 1 percent would be 1.5 million, and so 796,000 is roughly one half of one percent.

In other words, BLS took .5 percent of what you and I would consider unemployed and took them out of their total. And with that, unemployment went down one tenth of one percent.

Of course, if you take the July number of unemployed, 14.5 million, and add that 796,000 of discouraged workers, you get a total of 15,296,000.

In a work force of July’s number of 154,504,000, that’s an unemployment rate of 9.9 percent.

Bottom line: there’s no good news in the July jobs report… Among other things the report shows that the number of long-term unemployed (those jobless for 27 weeks or more) rose by 584,000 over the month to 5.0 million and that the civilian labor force participation rate declined by 0.2 percentage point in July to 65.5 percent.

Yes unemployment dropped, but it didn’t drop because the economy is improving, it dropped because of a declining workforce.

Related

• What Do Unemployment Figures Mean? – Washington Post
• President Obama Predicts Unemployment Will Hit 10% This Year – ABC News

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