Unemployment: Continued Claims over 3.4 Million
Submitted by
CalculatedRisk on Thu, 08/28/2008 - 5:10am (105 comments)
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first to forget to fudge all the data.
Buy the GDP number it clearly is not
cr -- would you care to plot the real GDP series overlaying this continued claims bit? it would be interesting to illustrate the lag, if any.
One of these things is not like the others. One of these things is not the same.
What? No Personal Employment Deflator to tell you that you didn't really just get outsourced?
Free trade saves the day, for now.
Luckily most of the real estate agents aren't counted.
Pretty soon even the Wright Model B's wings get clipped and it indicates recession. It's a great investment tool, if it's your desire to be completely wrong at just the wrong time so you can lose really BIG!
I would say the GDP metric that can continue to give such a rosy picture of the economy is in dire need of retuning so that it reflects more closely the reality that most people in the country feel.
If the rest of the world boosted GDP by 3.1 pts, do Americans have any excuse for not paying their debts?
If the rest of the world boosted GDP by 3.1 pts, do Americans have any excuse for not paying their debts?
What, you don't like our trading partners getting paid interest in continually worth less dollars?
Gross Private Domestic Investment:
Q407: -11.9
Q108: 5.8
Q208: 12.0
Believe it or not - we're walking on air...
MarkS writes:
"If the rest of the world boosted GDP by 3.1 pts, do Americans have any excuse for not paying their debts?"
pers. income data Friday am
Where's the post on the 3.3% GDP number!
If Obama wins and can replace the Ministries of Truth that Bush has set up with true Government statistic bureaus, we will find we've been in recession since Q$ 2007.
dollar rise stalling, Gold forming a base before resuming uptrend (?)
would not be surprised if SPX just saw its high water mark too this am
Obama will have to replace more than just the cabinet people if there is to be any change. Bushco has spent 8 year's populating the gov't with "loyal" people who couldn't give a rat's ass about truth, at least any realistic version of it.
Let's see profit missed at SHLD by 62% and the stock is barely red......
Ciao
MS
If Obama wins and can replace the Ministries of Truth that Bush has set up with true Government statistic bureaus, we will find we've been in recession since Q$ 2007.
My fear is that Bush has the fix in for some "technical corrections" to the inflation and payroll statistical models. They'll conveniently be implemented in 2009 just in time to blame the new president on for 70s style inflation and unemployment.
I know of at least one person who was added to those fake claim number's however her boss claimed she "resigned"...this was after not paying here for over two months. So she simply walked out.
The gaming of the numbers is just ridiculous at this point. They knew what SHLD was going to report and magically the GDP gets revised upwards (again).
Anyone "investing" on official numbers needs a head examination. That's not to say you can't take a little here and there in the short term riding the wave of BS.
Ciao
MS
Sniff * sniff
BTW that futures ramp after SHLD #'s but before the GDP was mighty impressive....
Happened to be up at the time....mighty early!!! (PST)
Ciao
MS
Awesome. WSM is getting crushed. Was anyone actually surprised that the American consumer can no longer afford $1000 6-piece cookware?
The retailer said it now expects earnings of nil cents to 4 cents a share for the third quarter and $1.03 to $1.15 a share for the full year. It had previously called for third-quarter profit of 17 cents to 23 cents a share and full-year profit of $1.45 to $1.58 a share.
Analysts expected third quarter earnings of 18 cents a share and full-year profit of $1.31 a share
No second half recovery.
FYI - From the WSJ story "The effect of the recent emergency extension of jobless benefits that had boosted initial claims in late July and early August has faded, a Labor Department Analyst said. Still, the impact remains on continuing claims since previous new claiments are now showing up in the continuing figures...."
So it looks like continuing claims are somewhat overstated for now.
And continued claims are now above 3.4 million for the first time since 2003.
do the extended unemployment benefits affect this?
wow my answer was being typed as I was typing!
Similar in energy - you can't believe the number of wind towers going up in S Minnesota, Iowa, etc. On one stretch of I 90 there are over a hundred going up in just one 'wind farm'... there are others. Plus the infrastructure to get that power to 'the city' is also going in at a crazy pace.
Meanwhile foreclosures & bankruptcies continue unabated... tell me this isn't f/u crazy.
I'm wondering if you or anyone else has come up with a way to normalize the continuing numbers since the law extended the benefits another 13 weeks effective late last month (as I recall).
Factors I think need considering include:
--discounting the current number by 1/13 for each week since the law went into effect, reflecting the continuing presence of unemployed for another week.
--discounting that number by some factor that reflects the current norm for people finding jobs (what percent of those on unemployment for 26 weeks find jobs in the 27th, 28th, etc?)
--maybe discounting the result by the number of additional people who go on unemployment for the first time because the benefits have been extended.
Trying to make these numbers comparable will not be an easy task.
this one has fallen through the cracks, but to all the accountants out there, here it is:
IFRS
not sure if it will help, but it will make things different.
is FASB going to vanish or just go through a name change?
dryfly -
Q407 was still at -0.2% for second month revision, after having been positive since released in January. Q108 was just 0.9% - so wait another 3 or 4 months and that will be revised negative too.
A year from now, when preliminary GDP is released for Q209 - let alone revisions - and the number is >-2%, and Q208 GDP is revised to 0.5%, we won't even remember what we're discussing right now.
I dont think the UI Cont Claims numbers include the extended claims.
However, they would include folks who filed a regular claim because they heard about the extension.
DD
We'll be moving to IFRS in the US as soon as 2011. IFRS rules are not as intricately worded as GAAP. IFRS rules are principles as opposed to rules based. Less detailed, they place more responsibility on Financial Statement producers to apply reason as opposed to allowing them to use the "letter of the law" to violate the spirit of a pronouncement.
The blog failed to post the GDP number as headline - again?
I don't mind spinning, saying the high GDP number is just because of xyz and we're still "in recession", but at least post a headline? People come here to read the latest news and comments on them....
GDP was up on oil prices I imagine. We do produce a lot of oil here and it was at recoed levels in Q2
Toyota lowers again:
Expired
Didn't they get the memo?
WSJ Main Opinion page:
Calling Hank Paulson/How not to reassure bank depositors and credit markets.
"Banks are supposed to pay premiums into that fund, with riskier banks paying higher premiums. But for most of the past decade most banks were paying no premiums at all, as bank failures were few and the living was easy. Last year the FDIC started charging again, but bank failures -- and insurance payouts -- are up sharply. This has Ms. Bair talking about sharp increases..."
Calling Hank Paulson - WSJ.com
dryfly | 08.28.08 - 10:27 am |
dryfly,
I watch our volumes like a hawk. About 24 months ago we had a pretty decent drop. It had been flat since. The last 4 months have seen decent growth in shipping volumes for us. I thought it was a fluke but the numbers are pretty consistent. And I am in one of the hardest hit areas.
Also every rental we own is full and for the 5th month in a row not a single late rent payment...This is a huge difference from just 18 months ago.
But ohhh boy,you should see the empty homes around here...
Chris
Ok, folks, the WSJ is now letting everybody know some banks didn't pay their fair share.
Now the blogs don't have to do it.
I don't know about GDP, but there are an awful lot of people who are unemployed who are not reported as unemployed.
And there are people who are going to the office everyday, but are making little or no money. These people are effectively unemployed.
Then there are employed people who would love to go back to their old jobs and absolutely hate what they are doing now. Not a problem with bill paying, so shouldn't be counted.
And a lot of people who never qualified for unemployment for one reason or another. Are they counted?
The recent economic reports describe an economy where the production/consumption balance is starting to shift away from consumption. I'd be very wary of the rally in retail.
I'd say what we have is the BiPolar Economy.
SHLD up 1.4%.....if it were not already way overpriced and not one of the heaviest shorted stocks in the DJI I'd be shorting away. Too many people in that boat already though.
Ciao
MS
Houston Chronicle's daily Gustav tracking from SciGuy...(I think Houston (Exxon, Shell, etc. chemical plants along the Houston Ship Channel)is probably more in danger than NO at this time.)
Gustav goes south. Intensity goes north. Uncertainty abounds. | SciGuy | Chron.com - Houston Chronicle
"People come here to read the latest news and comments on them...."
Not really. I follow news from a number of independent sources.
I check blogs for their own "original" opinions and specific angles, it helps to place analysis within the various specific backgrounds-tendencies of each source.
Some news make a headline but are mostly irrelevant.
Yay exports! Yay inflation! Yay govt spending!
News Release: Gross Domestic Product
oh, the hangovers we'll have
John McCain - POW Bros
YouTube - John McCain - POW Bros
With respect, I still think you "Probable Recession Area" should start in June '07
Cobradriver - nice to see you back. How was Fay?
From the GDP report (MW):
Nonfinancial corporate profits fell $46.9 billion, while financial corporate profits rose $24.7 billion. Profits from the rest of the world decreased $15.6 billion.
Financial corporate profits rose $24.7 billion?
Really?
Here in fundraising, we're facing stiff headwinds.
Talked to the development officer (fundraiser) for the university's nationally-known summer Shakespeare festival. They're having a good year critically, but ticket sales are down, donations are down, everything's down.
Bipolar economy? Probably so. In areas where there's infrastructure development or heavy industry, life's pretty good. In areas where wealth's been derived from debt, real estate, services, spending of discretionary income -- not so good.
However, Dryfly's post above about windmill construction says something I've said before -- the next pres would have to be blind crazy not to pull out all the stops on energy infrastructure development. Makes jobs and eventually more than pays for itself.
".....the lack of action in the Retail Holdrs ETF (RTH) is largely because a handful of stocks control all the weighting. Wal-Mart (WMT), Home Depot (HD), Target (TGT) and Walgreens (WAG) together make up nearly 50% of the ETF. Add Lowe's (LOW), Costco (COST) and CVS (CVS) and you have nearly 70% of the basket.
There are other options (with varying degrees of liquidity depending on the size you are trading) that target Retail.
The PowerShares Retail Portfolio ETF (PMR) is not equal-weighted, but the concentration in Wal-Mart (WMT) is far less, and there is no exposure to Target (TGT), Home Depot (HD), Lowe's (LOW), Costco (COST) or CVS (CVS). Instead, the top 5 weightings are:
Wal-Mart (WMT) - 5.4%
TJX Co's (TJX) - 5.3%
Autozone (AZO) - 5.2%
Gap (GPS) - 4.9%
Safeway (SWY) - 4.9%
Rydex has an equal-weight Consumer Discretionary ETF (RCD) that is interesting. It is weighted based on the S&P Consumer Discretionary sector. Top 5 holdings are Eastman Kodak (EK), Washington Post (WPO), Autozone (AZO), Sears (SHLD) and VF Corp. (VCF).
The SPDR S&P Retail ETF (XRT) is another option. The top 5 holdings are Family Dollar (FD), Kroger (KR) Sally Beauty Holdings (SBH), Blockbuster (BBI) and Costco (COST).
Copied from Item 3 & 4 - HERE:http://www.minyanville.com/articles/index/a/18698
link didn't seem to post. I'll try again
Five Things You Need to Know: Now, It's Main Street's Turn-Minyanville
OT: Rat meat in demand as inflation bites
Rat meat in demand as inflation bites
| Reuters
The price of rat meat has quadrupled in Cambodia this year as inflation has put other meat beyond the reach of poor people, officials said on Wednesday.
Not even squirrel?
The hub says the tracks really haven't changed that much, and actually the present track is worse for New O, as it puts the city in the upper right quadrent of the storm, which is usually where the worst weather is.
So, since we have a nice Robust GDP fig....
we can expect the govvie to demand the stimulus loan(aka paycheck advance) to be repaid pronto?
Market Factors has the scoop on Q3 and Q4 2008 GDP numbers!!
Market Factors: Scoop!! Q3 & Q4 2008 GDP Results
sequoia512 writes:
GDP was up on oil prices I imagine. We do produce a lot of oil here and it was at recoed levels in Q2
Is there any way we can extract that information from the released GDP number? That would explain what our increased "exports" are. But I was under the impression we import most of our oil.
But if exports are driving this economy, what happens if and when overseas markets dry up as they themselves enter into recession?
And what about the rising dollar's effect on this?
can the insurance industry survive Katrina II...
punditry-
As soon as the Fed raises rates since there's no recession.
They'll be lowering them soon to widen spreads even further. Only way these insolvent banks can even begin to survive. .5% in one year.....or sooner.
Ciao
MS
Cobradriver - nice to see you back. How was Fay?
Barley | 08.28.08 - 11:17 am | #
Meh...No rain at all here in Sarasota at work. We had about 6 inches at the home place in Port Charlotte. My sister in Bonita had somewhere around a foot...But no serious flooding.
Yes we are ready to roll with the preps if it becomes critical the next few days...
Chris
Terry: Why do you want to normalize? To some extent, extended benefits cause more of the otherwise "discouraged" workers to stay outside the woodwork for a while. Extend benefits even more and even more of them will "stay", our shadow army of the unemployed.
That's one factor why "Europe" has higher unemployment numbers, aside from a less restrictive definition.
Once benefits run out, there is no more incentive to show themselves out in the light. But they will still be unemployed.
Small business owners cannot file for unemployment. Add those "stealth" numbers to the fudged gov't figures and you come up with: Economy=FUBAR. Smile.....someone is laughing at you somewhere else in this great big world!
bluestatedon writes:
I'd say what we have is the BiPolar Economy.
bluestatedon | 08.28.08 - 11:02 am | #
I agree.
I wasn't shocked that GDP was up but I was shocked it was up that much. I don't expect that to continue.
Money Man writes:
Small business owners cannot file for unemployment. Add those "stealth" numbers to the fudged gov't figures and you come up with: Economy=FUBAR. Smile.....someone is laughing at you somewhere else in this great big world!
Money Man | 08.28.08 - 11:54 am | #
dryfly raises hand - that would be me... 1099s also. We don't count except in the household survey - there they ask if you are working not if you are making any money.
Anonymous writes:
punditry-
As soon as the Fed raises rates since there's no recession.
There is NO EXCUSE for not raising rates if the 3.3% is legit... not given the recent price inflation.
Unless the Fed Gov's know something we don't know... like the recipe used to cook the numbers.
Same goes for calls for more 'stimulus'... how could they even think about it given a 3.3% GDP bump?
Bizarro said: "Where's the post on the 3.3% GDP number!"
This isn't that kind of blog.
An economic report that CR considers important will get played-up here or not mentioned at all, depending on whether it supports his position or not. Track it yourself from one month to the next and you'll see.
An upward revision in GDP is major news, and deserves to be addressed by a blogger who routinely applies "probable recession" ribbons to his charts and has been claiming for a long time that there will be a housing -led recession.
Sebastia
From Bloomberg:
"The Labor Department said initial jobless claims dropped to 425,000 last week, matching economists' forecasts, from 435,000 the previous week. The level remains well above the 321,000 average of last year. The number of people staying on unemployment rolls rose to 3.423 million, the highest since November 2003."
I can see why everyone is so excited about this job report. Great news!
Speaking of asymmetry. If the GDP had come out this much lower rather than this much higher there would undoubtably be shouts for the Fed to ease. Where is the outcry for an emergency rate increase?
No furry tailed tree rats in Cambodia.
As lawyerliz notes it's better to be 10 to 20 miles from the eye on the LEFT side than 100 to 150 on the RIGHT.
You could play golf at Kiawah w/in 48 hours of Hugo. McClellanville is still recovering.
While we're on the subject New Orleans was also on the left side of the eye of Katrina and basically suffered no direct damage from the storm. The damage was the catastrophic failure of infrastructure: the levees and then the pumps
M-F
"The results should provide a big boost to Republican chances in November which ought to be great for stock prices."
wanna make a bet?
dryfly said: "There is NO EXCUSE for not raising rates if the 3.3% is legit... not given the recent price inflation.
Unless the Fed Gov's know something we don't know... like the recipe used to cook the numbers.
Same goes for calls for more 'stimulus'... how could they even think about it given a 3.3% GDP bump?"
The Fed always errs on the side of caution, at least in respect to lowering rates.
The last recession ended in 2001, but the Fed's last easing was June, 2003 and it didn't start tightening again until June, 2004.
After the 1990-91 recession, the last easing was in September, 1992, with the first tightening in February, 1994.
Sebastia
Punditry--
of course insurance companies will survive. They will just deny or delay the claims!!
All us folks on the east coast should just move 100 miles inland immediately, including from cities that have been here for 250 years.
What recession are they erring on the side of caution this time Sebastian?
Bear - there is no question, when that 4.1% Q3 2008 GDP number is released, it will prove to be clear sailing for the economy. All this recession talk is just stinkin' thinkin'.
Rob Dawg writes:
Speaking of asymmetry. If the GDP had come out this much lower rather than this much higher there would undoubtably be shouts for the Fed to ease. Where is the outcry for an emergency rate increase?
The Big Picture
M-F, I read that and said whhhaat?
And then I saw the word comedy in the banner.
Just having some fun
Rob Dawg said: "What recession are they erring on the side of caution this time Sebastian?"
No recession, those were just off-hand observations. The Fed also erred on the side of caution in 1995 and 1998, easing when there really wasn't any economic need. That's just the way it behaves, and knowing that is worth something. I doubt we're going to have any Fed tightenings before Spring, 2009 at the earliest.
Sebastian
you should post more on your blog M-F.
Dryfly,
Where's the money coming from for those wind and energy infrastructure investments? Mainly private or public?
Okay Bear - here is another one
Market Factors: Scoop #2!! New Government Unemployment Measure to be Unveiled Before November
sidneymoncrief, a little bit of the oil company subsidies would go a long way.
maybe pull out of iraq and stop throwing money hand over fist to the private contractors.
U-6 tells the real story, U-3 is a timewaster anymore.
M-F that's a good one.
Where's the money coming from for those wind and energy infrastructure investments? Mainly private or public?
sidneymoncrief | 08.28.08 - 12:34 pm | #
Private utilities though there are certainly subsidies.
Realize there is A LOT of wind out here on the prairie & it is getting utilized. Wind over the Buffalo Ridge in western Minnesota, eastern S Dakota and NW Iowa averages 20-25 mph on an annual basis (wind speeds recorded & averaged over the whole year)... that is a lot of wind over a large area.
Plus it really doesn't take up a lot of room - they drop them in corn & bean fields & pay the farmers royalties (rent). Farmers farm around them so it is very different than fuel ethanol in that you can get food and energy from the same acreage.
Most of these units are fabricated domestically though some of the engine components are imported.
There is a shocking number of these things going in right now.
Thanks Bear!
To be fair to both democrats and republicans I added a similar paragraph to the end of each post:)
"Democratic Party offials said while the number does seem very good, and does undercut their case to the electorate, they were very busy with the election. They expect to look into the new measure sometime after the November election."
A quick observation, the recession is mostly coastal related and/or construction/finance, related industries. Flyover and other industries are softer but not in recession.
What other industry is experiencing a recession? The MSM. So when you read about a recession think of who wrote it and what environment they are in. Maybe the MSM is in depression . . .
Dryfly,
Yes indeed many of the wind turbine components are now being built in the USA. Here in Colorado the Danish company Vestas is expanding its manufacturing which is good news for our local economy. But it won't have an effect on ethanol production as currently the two are apples and oranges until we plug in more cars.
rowen writes:
Awesome. WSM is getting crushed. Was anyone actually surprised that the American consumer can no longer afford $1000 6-piece cookware?
The retailer said it now expects earnings of nil cents to 4 cents a share for the third quarter and $1.03 to $1.15 a share for the full year. It had previously called for third-quarter profit of 17 cents to 23 cents a share and full-year profit of $1.45 to $1.58 a share.
Analysts expected third quarter earnings of 18 cents a share and full-year profit of $1.31 a share
No second half recovery.
second half of '10 perhaps....
M-F why be fair? fair and balanced is sooo overrated.
It's getting late for a recession to finally show up. Unless the unemplyment claims continue to raise unabated, the time for a recession has passed. The peak in unemplymnet is always at the very end or past the recession. Since we are GDP positive and that with a raising trend, something exceptional has to happen for us the enter a real and not feel bad only recession.
O-Joe
I love coming here to read why the GDP numbers aren't the real GDP numbers, and how they should calculate it like [insert name here] says. Or how the employment numbers aren't what they are because, you know, there's a vast conspiracy to cook the numbers by [insert whatever party's minions you don't belong to here]. Or how the posters on blogs know better than the people the compile the numbers.
Now, the 3.3% is, of course, inflated because of the stimulus. But it is also good because of exports. And what we should be talking about is...can we keep exports up and for how long? Long enough to keep us rumbling forward while the financial system clears? Long enough to keep the dollar in some sort of lower value stasis so that those sectors don't go down?
Of course, maybe the whole housing thing isn't having the effect everyone here expected on the economy as a whole. I keep saying that the peak here in MA was in August 2005. That's 3 years ago now. And the economy here isn't great, but it isn't tragic either. Just sayin....
Since we are GDP positive and that with a raising trend, something exceptional has to happen for us the enter a real and not feel bad only recession.
O-Joe
Optimistic-Joe
Read: this time it's different.
0-Joe
The GDP deflator is funny, which makes the GDP number funny. The Big Picture covered it well.
This is sort of like herding sheep...bark a GDP number to change the heading of the flock.....but the point is to harvest wool and the occasional lamb chop, so does the direction really matter?
Know your investments (literally - the books, the people involved), or get fleeced, or worse, cooked.
you can believe those numbers.. you can believe the unemployment numbers and everything else our incompetent government says.
if you're brain isn't working..
What other numbers are there?
If your only explanation for a GDP uptick is black helicopters, it might be time to check the drinking water.
who said anything about black helicopters?
believe what you want.
Cool. If the PTB have managed to engineer an employment recession without inflation or GDP problems, is that not the best of all possible worlds?
if you really believe those numbers, then recession must be over right?
what's the action going to be like? where are you putting your money?
the USA sent the world in recession, and know they are doing well thanks to exports go figure
"you know, there's a vast conspiracy to cook the numbers"
I agree. Our government is a model of openness and ethical behavior. They would never manipulate data or markets for partisan causes.
either would corporate america..
right...
"the USA sent the world in recession, and know they are doing well thanks to exports go figure"
Which means they will have oodles of money to buy yet more debt and widgets from us.
in 6 month the USA has become the new china, well done
This could be the first severe recession that never showed up in govt data.
Why? Because there is at least 1 error in their model.
It would be interesting to look at Continued Claims as a % of the total work force, especially when comparing against the situation in the early 90's. The trend on a percentage basis is still headed up and to the right, but the entry marker for a recession would be different since the labor force is larger today.
jul writes:
in 6 month the USA has become the new china, well done
jul | 08.28.08 - 3:47 pm | #
Ummmmm.... no.
We just have a smaller deficit... say maybe $450B instead of $500B.
That is one helluva a long way from a surplus...
It blows my mind that the rest of the world bitches if we consume all the resources then also bitches that we DON'T consume all the resources (on their credit no less) and instead actually contribute SOMETHING to the production of said consumption. Wow.
Please explain that logic to me - I must have indigestion from a generation of free lunches clouding my thinking.
Dryfly, everyone is re-arranging deck chairs. You know that.