Despite all the census hiring, initial claims not plunging. In the summer months, look for a lot of GM layoffs and for state and local cuts to more than offset the Stimulus hiring.
>
There is a reasonable chance that claims have peaked for this cycle, but it is still too early to be sure, and if so, continued claims should peak soon.
>
Do you REALLY think so? There is no recovery on the horizon and many companies are holding on to employees because if there is a quick recovery, they don't want to have to go back and hire all the people they just laid off. In the next few quarters, when it is clear that there will be no recovery any time soon, the market will be FLOODED with more unemployment.
Auto workers still file for unemployment benefits while they are in the job bank (wish I could get such a deal.) But the job bank is gone, so you bet they'll be in line to get the unemployment benefits because that's all their getting this time.
The turn back up of the 4wk avg is very bad news, and it looks like CC are accelerating, they were going up at about 150k or so a week (will have to go look at the actual numbers and compute, but just from memory) now up 202K. Not good. I had considered the "peak" in new claims to be the single most important green shoot, but it looks like it is wilting. Have to keep a close eye on that one. Also copper has headed back down over the last week or so, also not a good sign, it is after all the metal with a PhD in Econ.
Typically the four-week average peaks near the end of a recession.
A close look at the chart will reveal that it is quite usual for there to be intermediate "peaks" on the way up. This was especially so in the 1982 recession -- the last severe recession having anything in common with this one.
Why would anyone think the rate of job loss is about to slow? The worst carnage in the housing market is still ahead, as the many vacant homes owned by desperate people who've held out more than a year now without significantly dropping their wishing prices realize the market is not coming back this summer, and throw in the towel.
Here in the northwest suburbs of Chicago, the sales rate is less than a third that of 2006, and there are almost no sales at all above $700,000, the level above which a very large fraction of the MLS listings are priced.
It's a good thing we bailed out all those high paying jobs at Goldman, AIG, FRE, FNM, and all the other TARP banks otherwise the unemployment figures would be plug ugly.
Saving wall street is fundamental to saving mainstreet.
barbadkatte (profile) wrote on Thu, 5/14/2009 - 1:02 pm
Would UE be a lagging indicator even in a consumer led recession ?
Good question, probably yes, because some people cut back when their neighbors lose their jobs but before they themselves lose jobs, many people lose income while still employed through fewer hours, and lower asset values cause a negative "wealth effect."
There's also that small matter of Advanta having cut off all credit card lending to a huge number of small businesses, as reported on CR just the other day ( Advanta Halts New Credit-Card Lending ).
.....lets not talk about the more unfortunate and truly hungrier people who have run through their Unemployment Insurance - now falling off the rolls into uncounted oblivion.
I also expect to see an uptick in unemployment as the academic year comes to an end. At my small college, a number of faculty and staff have been let go, but won't start claiming unemployment until their last paycheck has cleared. Multiply that by all the colleges, community colleges and universities across the country - could be a significant jump...
UE is a leading indicator for consumer credit deterioration and prime mortgage default rates...hello, positive feedback loop (with negative consequences for inflated asset values)...
What if this isn't a recession but a depression? and what if it peaks again a year from now?
Since the start of the recession in late 2007, the monthly unemployment rate has risen from 4.9 percent to 7.6 percent in January 2009. Before thinking about the Great Depression, realize that unemployment rates have exceeded 7 percent in 139 months since World War II. This includes 32 months between 1974 and 1977, 76 months between 1980 and 1986, and 21 more between 1991 and 1993. The Great Depression was far more disastrous. One year after the stock market crash of 1929, the unemployment rate had risen from 2 percent to 10.8 percent. The next year it was 16.8 percent. Then unemployment rates rose above 20 percent for four straight years!
It does not end there. The unemployment rate exceeded 14 percent for five more years until finally dropping below 10 percent again in 1941.
... my crystal ball says buy stocks in online unversitys... because if you cant work, go to school on the webs! cheaper than going physically too. plus better than watching soap operas all day.
At my small college, a number of faculty and staff have been let go
don't forget the students who probably will be counted as unemployed.
wow, faculty let go? must have been untenured or adjunct. one of the signs of the bottom will be when the mid- to high-level educational administrators are axed.
Check the U-6 definition, BSR - includes the marginally attached and discouraged workers - they will be counted if they give job related reasons for their current circumstances....
wow, faculty let go? must have been untenured or adjunct. one of the signs of the bottom will be when the mid- to high-level educational administrators are axed.
Welcome to the new reality at many small colleges - no tenure but a contract system, which can be easily broken by administration. Some of the faculty had been here 20 years - excellent teachers, excellent service, but vocal critics of our administration (and you nailed it - background in educational administration).
All of this linking initial claims with the timing of a recession makes sense in an inventory led recession. Cut production to cut inventories lay off people temporarily and when the inventories are cut people are hired back and the recession ends. Secondly, looking at the data once claims peak they end to fall quite quickly- consistent with the inventory hypothesis. That hasn't happened this time round- while claims may have peaked they certainly haven't started t drop rapidly. Also the historic data shows that the co-relation between initial and continuing claims is breaking down. Suggesting that when people lose their jobs now they have a harder time getting them back. This would be consistent with a service based economy versus manufacturing. Service sector loss of jobs are also associated with closing of the business.
Student who graduate but do not find jobs do not get to file for unemployment benefits (you have to be insured employed and lose your job.) They do get counted in the household survey.
.....realize that for all intents and purposes, increasingly tens of thousands have stopped receiving unemployment checks starting the first part of this year.
.....first, the "home ATM" disappears; second, the last of the remaining credit cards get pulled or maxed; thirdly, the unemployment checks stop - I'd be about at the end of my rope if I were in the same boat as many in America........
"There is a reasonable chance that claims have peaked for this cycle, ...."
With the next wave of layoffs from:
Car companies and all their downstream suppliers
State employment (see CA for instance)
Plus no consumer demand for goods
conspiracy lovers, i found a great article for you. re: the bilderberg meeting (starts today) and their plans for the world economy (long stagnation or short/deep depression). see link
The economic situation is much worse than 1930 and the consequences could also be much worse. Unemployment might even hit 30 percent because there are very few replacement jobs available. Back then jobs were literally shovel-ready and required little training.
Has anyone seen any analysis of how all the mandatory unpaid leaves of absence are affecting these numbers? I know in my state people who are furloughed can apply for unemployment benefits for leaves as short as two weeks. A lot of these people are very very slightly underemployed, but are collecting benefits.
".........they will be counted if they give job related reasons for their current circumstances...."
...........I can introduce you to a thousand plus Nam vets just right here in this small town that have said "EF It" - and dropped out of all rolls such as these - no question. There is no "neat & tidy" to it. There IS subterfuge, deceit, and under-reporting.
wow, faculty let go? must have been untenured or adjunct. one of the signs of the bottom will be when the mid- to high-level educational administrators are axed.
Amen to that. A lot of districts in my area are laying off untenured teachers, consolidating positions, instituting hiring freezes, etc ... but many of these same districts post salary information online, and the sheer number of administrative positions - never mind the salaries! - beggars belief.
Our district alone - with just a couple thousand K-12 students - has a superintendent, an assistant super, six principals, three or four assistant principals, a full-time IT manager, a full-time custodial manager, two full-time curriculum directors ... and on and on, ad nauseum. Not one of them directly involved with teaching students or with maintaining the schools.
And comparatively speaking, our school taxes are pretty reasonable. I can only imagine the layer of fat ripe for the cutting from the school systems in places like CA or NJ.
wow, faculty let go? must have been untenured or adjunct. one of the signs of the bottom will be when the mid- to high-level educational administrators are axed.
Those administrators hope never to get that far, which is why the first public cut proposals involve closing prisons and releasing rapists into your neighborhood.
.....first, the "home ATM" disappears; second, the last of the remaining credit cards get pulled or maxed; thirdly, the unemployment checks stop - I'd be about at the end of my rope if I were in the same boat as many in America........
But, they've still got a sense of false-entitlement, combined with all those guns and ammo they were persuaded to buy, and it can go one of 2 ways...
They can go sell the arsenal for grocery & rent money and last a little longer, or go out both barrels blazing.
UAW workers file for unemployment and collect a supplement to that through the union from something called the Sub Fund, so they will be showing up in the unemployment stats. The Sub Fund my not be in the best financial shape at this time. The Job Bank was an entirely different animal and is dead.
State and municipal layoffs are already happening. In Wisconsin for instance, 1100 state emplyees are being layed off with everyone else getting 16 days of mandatory unpaid leave. I believe this is just for starters as tax revenue is shrinking here as fast as everywhere else. A hiring freeze has already been in effect for over a year at the state level and many municipalities. When the larger states start their layoffs the numbers should be interesting. Not good for PCE.
"Yea though I walk through the Valley of the Shadow of Debt
I shall fear no default rates; for thou art with me
Thy printing presses and thy stress tests comfort me
Thou preparest a bull market for me in the presence of Roubini, Taleb, and Grant
Thou anointest my portfolio with liquidity; my wallet runneth over
Surely bonuses and bailouts shall follow me all the days of my life
And I will dwell in the house in Greenwich forever.
A-Ben"
-- Colin Negrych
found it in "The Death of Kings: Notes from a meltdown" by Nick Paumgarten in this week's New Yorker
Half a league, half a league,
Half a league onward,
All in the valley of Death
Rode the six hundred.
"Forward, the Light Brigade!
"Charge for the guns!" he said:
Into the valley of Death
Rode the six hundred....
I just read through last night's comments about Arnold selling public parcels of land to fund his crack habit I mean budget deficit.
First thought that comes to my mind is that this will produce a backlash from the public that he is not counting on. It will be terrible and it will produce an angry, lasting bloc of voters who are against anything he tries to do involving the budget.
Second thought that comes to my mind is the old addage that every crisis is an excuse to loot by the rich.
Vader,
The method of calculating official unemployment statistics was dramatically changed in the 1960's and again in the 1990's. It's virtually impossible to directly compare numbers generated in the 30's with the [mis]calculations used today. Consider just the changes to the Current Population Survey: How the Government Measures Unemployment
a friend of mine is a teacher at a high school in sunnyvale, ca.
Not the most expensive school district in the bay area amazingly, but one of the higher ones.
He told me the teaching secretaries union actually negotiated a raise or something last year and that the secretary for their principal was making 80k a year based on the new wage scale.
So more than all the teachers. Their IT people apparently get paid loads of money to sit around and really not do anything (or as my friend says, screw up all of microsoft exchange so it doesnt work with outlook...)
I mean their IT lackey types make in the 70s with all the good benefits and pensions (I have met some of them through him).
I work at a company that automates IT administration with software .... so I'm fairly familiar with how much the IT grunts who say plug computers in and roll out patches make at companies all over the country, and 70k ish with pensions and really good healthcare for a lackey and not an admin is generally pretty generous.
They also have a union I believe, and a lot of it is they get some sort of raise every x number of years experience. It doesn't take much to roll out say windows patches and plug computers in, but some of these guys after 20 years are making far more than private sector for similar work. Granted I'm talking about one very high paying school district in a very high living cost area but I think there are plenty of areas they will find to cut.
To my mind, the most significant “green shoot” we have seen in the economic data was the topping out of the four week average of initial claims for unemployment insurance in early April. In this regard, I find today’s data deeply troubling. New claims rose by 32,000 in the last week to 637,000. This caused the four week average to rise by 6000 to 630,500. While it is still well below its peak of 658,750 this reversal of direction is distinctly unwelcome. Historically the four week averages peaks right around the point where the National Bureau Of Economic Research (NBER) eventually gets around to dating the end of the recession. Because of this, it is important to watch the number like a hawk.
Think of initial claims as a river running into a lake. The lake is continuing claims. There are two rivers that run out of the lake, one that leads to happiness and the other to despair. The happy river is when continuing claims fall because the person got a new job, while the river of despair is when the unemployment claim simply runs out and the person is left with no income at all. The data does not directly tell us the flow rates of either of those rivers (the monthly jobs report helps answer that question). However, in any case it looks like both rivers are partially dammed up right now. Every week the level of continuing claims rises to a new record, flooding the shores. This week it stands at 6.56 million, and increase of 202,000 in a single week. To some extent that may be due to extensions of unemployment benefits due to the stimulus bill. That has helped to slow the flow into the river of despair. However, it also seems to be due to a lack of new jobs being created. The river of happiness appears to be a trickle, and is not available to irrigate the green shoots of the economy. The graph below (larger version available at Blogger: Page not found shows the level of continuing claims as well as the four week average of new claims.
If you look very carefully, you can see the dip at the end of the blue line. However, note that it is possible to have false signals, for example look carefully at the way up in the 1982 recession, it was not a smooth line. I would also note that in the last two recessions, the four week average did not move straight down the way it did in earlier recessions, rather it moved off a peak and then sort of plateaued. Thus even if this does not turn out to be a false peak, it does not mean that happy days are here again. I would expect a rather large Mesa to form even if we have seen the actual top tick in the series. There are a huge number of obvious sources to cause initial claims to start to rise again. The most notable of these are the effects of the Chrysler bankruptcy and the very high potential for General Motors (GM) to follow. This not only causes layoffs directly at GM, but throughout the country. Just this week A.K. Steel (AKS) announced that it was closing a mill in Kentucky which will cause 750 layoffs and Arcelor Mittal (MT) will close a steel plant in Indiana causing 1,000 jobs to be lost. Even under the out of court restructuring plan, GM is going to shut down over 2000 dealers. If you assume 50 people work at each dealership (salesmen, mechanics etc) that adds up to 100,000 jobs right there. State and Local budgets are also under severe stress and that may cause very significant layoffs of teachers, firefighters, prison guards and social workers (not to mention even longer waits at the Department of Motor Vehicles). Yes the stimulus package helped a bit there, but it has only partially filled the hole. The four week average is a key indicator. Watch it closely, since it could go either way at this point.
As others have already stated, the dealership crash will be another blow to this recession and will probably jumpstart the downward spiral again unless someone start hiring a lot of people.
It's not the working wages, it's the retirement packages that are killing cities. LA spends more on the past retired than on the currently employed. "Fully funded" plans aren't.
The roof the roof the roof is on fire
The roof the roof the roof is on fire
The roof the roof the roof is on fire
We don't need a special election let the motherfker burn
Burn motherfker burn
"A painter from Bavaria had a similar idea about blaming racial groups; it helped pull his country out of an economic decline."
He was an Austrian. He didn't pull his country out of a decline so much as put off the inevitable decline by edging towards war. His was a state the salvation of which was to be plunder and conquest.
It's fair that if someone just wants one magic indicator, this one (peak of initial claims) is a likely candidate. But....as CR says, we can't be sure yet that was the peak.
Has CR posted new job creation? (note: we most often hear net jobs, or net employment, change). I think the graph of new job creation would be rather interesting.
Pavel writes: If anyone ever deserved a fully funded retirement package it's a firefighter.
Saying "hail the glorious workers" is hardly an argument, Pavel. We all deserve a fair wage and funded retirement.
How about some data. Here's a snapshot from the Orange County Register: Last year OCFA's 814 firefighters, engineers and captains earned a median annual pay of $137,784... Interviews and records show that a key factor behind the growth of overtime is the enhancement of pension benefits granted to firefighters in 2001. The pension benefits have boosted the cost of each firefighter dramatically, simultaneously discouraging the agency from new hires and encouraging more early retirements.
"If anyone ever deserved a fully funded retirement package it's a firefighter."
I disagree. Expecting private employees without any retirement package to pay for a "fully funded retirement package" for any public employee is not politically viable. Yesterday's announcement that the recession is continuing to drain funds from SS and Medicare, shortening the time until they are busted, makes this clear. As states and municipalities go bankrupt, every contractual promise will be renegotiated or flat-out broken.
CR,
Another nice graph might be the size of the "revised" adjustment they make week-on-week and month-on-month.... just to get an idea of the size of the con.
Pavel, I'm ex-military, so I don't need more examples of people who have risked their lives and often get butkis. But you need to tell me your number of what is "fair": using your argument, any number is fair. (And I'm assuming you're for raising our taxes to fund these exploding costs, then? No free lunch, dude!)
As for me, I suck it up and use the "knew the job was dangerous when I took it" approach; the true workers just want fairness. The scamsters want an open spigot.
Ok, so I am way late, and you have all scurried off to the next thread. But...
CR - At the risk of saying "this time is different", what may be different this time is that the creation of new jobs is far slower than in recessions past. In other words, in past recessions, the peak in initial claims may have coincided with near-end of the recession because the rate of new job creation was fast enough to reasonably quickly bring down the U3 and U6 numbers. One would think that the recession ends when in aggregate we have more jobs, which is a function of the input (new jobless claims) and output ( new job creation).
But what happens when the rate of new job creation is so slow that the U3 and U6 number linger at the highs even as initial claims fall? Why would this happen? Due to excruciatingly slow job creation.
So... I wonder what that graph looks like overlaid with U3 and U6 numbers?
Regards,
Ham (not green) Poops
(btw the HamPoops handle is from a late evening thread way back that still makes me chuckle)
A strong retirement system is nigh mandatory to increase the velocity of money (too much savings is always a problem) and to get people to quit working so people with minor (near college age or younger) children can be promoted
What killing us is the evil trio of other nations merchantilism , wage arbitrage and the dirty secret that we don;t make enough real wealth-- fix those, relfate wages and we will be fine.
The term I used was "illegal" and did not identify a particular race. It includes all illegals. Your wish for it to be racest says you have a problem. - LBD
scapegoating any subset of the population is the problem.
"anyone who risks his life to save ours is worth every cent he gets. What's your life worth, DC, fried?"
This is a dead thread,but the chance of serious disability or death is part of the job description. Industrial accidents happen often as well...check out the stats on meatpacking plants or coal mines...Combat vets face even worse odds on the job...do they get a "fully funded retirement package" ? Am I to assume you took to the streets to express your outrage when McCain led the fight to kill a new GI bill last summer?
Excising the word "deserve' would be useful, as there is no money to pay for these packages...for cops, firemen, teachers, or public health workers.
What my life is worth to me is no concern of yours, old man. Take your ugly attitude and stick it.
Dang.... continuing claims! Whew!!!
That's Cliff Hiking if you ask me!
Despite all the census hiring, initial claims not plunging. In the summer months, look for a lot of GM layoffs and for state and local cuts to more than offset the Stimulus hiring.
And GM hasn't shut down for nine week yet. (On top of the dozen factories they plan to abandon.)
CR is going to have to rescale the graph if he's going to fit 8 million continuing claim on there.
A pony delayed is a pony denied.
This has to be good for consumer spending going forward.
CR, can you post a graph of continuing claims and recessions? I bet that paints a nice picture.
.......there is no other way to slice it - this summer will constitute the slow "bleeding out" before the final gutting in the fall.
CR, claims relative to labor force would be better for historical comparison.
Thank you.
I thought the worst was over....did these guys not get the memo ?
Will auto workers not show up on unemployment reports due to receiving pay during shut downs due to UAW contracts?
Green shoots, smilin' at me
Only green shoots -- what I see
OT: CR, you should check out the post that shill linked to earlier.
shill (profile) wrote on Thu, 5/14/2009 - 7:13 am
Tax Credit as Mortgage Down Payment Now Official Federal Government Policy
It seems as if the taxpayers are now funding DAPs. We've really learned nothing.
Don't worry this is already priced in. Plus with all the new free time these people have they can get out and stimulate the economy. Win/Win.
/snark
Do you REALLY think so? There is no recovery on the horizon and many companies are holding on to employees because if there is a quick recovery, they don't want to have to go back and hire all the people they just laid off. In the next few quarters, when it is clear that there will be no recovery any time soon, the market will be FLOODED with more unemployment.
Auto workers still file for unemployment benefits while they are in the job bank (wish I could get such a deal.) But the job bank is gone, so you bet they'll be in line to get the unemployment benefits because that's all their getting this time.
Rajesh, I can manage!
bernandoo, it looks similar to the four-week average and recessions - I'll try it.
best to all.
Thank God UE is a lagging indicator! The recession might already be over.
Woulda rallied on this last week. PPI, UE claims "higher than expected". A nice change from "lower than expected".
Would UE be a lagging indicator even in a consumer led recession ?
Another Loss For ING
Another Loss For ING - Forbes.com
793.0 million euros ($1.1 billion) due to a slide in asset valuations and charges for restructuring its business.
ING's insurance business lost 979 million euros ($1.3 billion)
CR's post reminded me to add this point to my unemployment article:
Obama plans to export (exile) civilian labor to Afghanistan (the LBJ solution to unemployment).
Source: Obama's Afghanistan 'surge': diplomats, civilian specialists | McClatchy
Mine: Not One Cent: Exporting the Unemployed, Debt: Japan and USA, China Cancels US Credit Card
The turn back up of the 4wk avg is very bad news, and it looks like CC are accelerating, they were going up at about 150k or so a week (will have to go look at the actual numbers and compute, but just from memory) now up 202K. Not good. I had considered the "peak" in new claims to be the single most important green shoot, but it looks like it is wilting. Have to keep a close eye on that one. Also copper has headed back down over the last week or so, also not a good sign, it is after all the metal with a PhD in Econ.
Typically the four-week average peaks near the end of a recession.
A close look at the chart will reveal that it is quite usual for there to be intermediate "peaks" on the way up. This was especially so in the 1982 recession -- the last severe recession having anything in common with this one.
Why would anyone think the rate of job loss is about to slow? The worst carnage in the housing market is still ahead, as the many vacant homes owned by desperate people who've held out more than a year now without significantly dropping their wishing prices realize the market is not coming back this summer, and throw in the towel.
Here in the northwest suburbs of Chicago, the sales rate is less than a third that of 2006, and there are almost no sales at all above $700,000, the level above which a very large fraction of the MLS listings are priced.
It's a good thing we bailed out all those high paying jobs at Goldman, AIG, FRE, FNM, and all the other TARP banks otherwise the unemployment figures would be plug ugly.
Saving wall street is fundamental to saving mainstreet.
barbadkatte (profile) wrote on Thu, 5/14/2009 - 1:02 pm
Would UE be a lagging indicator even in a consumer led recession ?
Good question, probably yes, because some people cut back when their neighbors lose their jobs but before they themselves lose jobs, many people lose income while still employed through fewer hours, and lower asset values cause a negative "wealth effect."
Rajesh,
Thanks, I heard they still got some pay and partial unemployment. That's going to crush Michigan.
There's also that small matter of Advanta having cut off all credit card lending to a huge number of small businesses, as reported on CR just the other day ( Advanta Halts New Credit-Card Lending ).
"Typically the four-week average peaks near the end of a recession."
What if this isn't a recession but a depression? and what if it peaks again a year from now?
Another heavy weight put on the bottom of the "L" shape
.....lets not talk about the more unfortunate and truly hungrier people who have run through their Unemployment Insurance - now falling off the rolls into uncounted oblivion.
I also expect to see an uptick in unemployment as the academic year comes to an end. At my small college, a number of faculty and staff have been let go, but won't start claiming unemployment until their last paycheck has cleared. Multiply that by all the colleges, community colleges and universities across the country - could be a significant jump...
UE is a leading indicator for consumer credit deterioration and prime mortgage default rates...hello, positive feedback loop (with negative consequences for inflated asset values)...
What if this isn't a recession but a depression? and what if it peaks again a year from now?
Since the start of the recession in late 2007, the monthly unemployment rate has risen from 4.9 percent to 7.6 percent in January 2009. Before thinking about the Great Depression, realize that unemployment rates have exceeded 7 percent in 139 months since World War II. This includes 32 months between 1974 and 1977, 76 months between 1980 and 1986, and 21 more between 1991 and 1993. The Great Depression was far more disastrous. One year after the stock market crash of 1929, the unemployment rate had risen from 2 percent to 10.8 percent. The next year it was 16.8 percent. Then unemployment rates rose above 20 percent for four straight years!
It does not end there. The unemployment rate exceeded 14 percent for five more years until finally dropping below 10 percent again in 1941.
This Is Not Another Great Depression - Freakonomics Blog - NYTimes.com
A descending-staircase depression will yield many false bottom calls.
... my crystal ball says buy stocks in online unversitys... because if you cant work, go to school on the webs! cheaper than going physically too. plus better than watching soap operas all day.
At my small college, a number of faculty and staff have been let go
don't forget the students who probably will be counted as unemployed.
wow, faculty let go? must have been untenured or adjunct. one of the signs of the bottom will be when the mid- to high-level educational administrators are axed.
Should also add that public schools will also contribute to the UE numbers in a month or so. Lots of cuts planned here in the local school system.
Yes.
CR,
"There is a reasonable chance that claims have peaked for this cycle, ...."
On a "gut level," how confident are you about that? Ten, 20, 50% ...?
Take a look here the educational layoffs are big!
Untitled Document
Check the U-6 definition, BSR - includes the marginally attached and discouraged workers - they will be counted if they give job related reasons for their current circumstances....
Table A-12. Alternative measures of labor underutilization
19th century Claim Jumpers: a person or persons that illegally occupy another's land claim.
21st century Claim Jumpers: a person or persons that got forgotten in the unemployment numbers claims.
Basel Too writes:
wow, faculty let go? must have been untenured or adjunct. one of the signs of the bottom will be when the mid- to high-level educational administrators are axed.
Welcome to the new reality at many small colleges - no tenure but a contract system, which can be easily broken by administration. Some of the faculty had been here 20 years - excellent teachers, excellent service, but vocal critics of our administration (and you nailed it - background in educational administration).
All of this linking initial claims with the timing of a recession makes sense in an inventory led recession. Cut production to cut inventories lay off people temporarily and when the inventories are cut people are hired back and the recession ends. Secondly, looking at the data once claims peak they end to fall quite quickly- consistent with the inventory hypothesis. That hasn't happened this time round- while claims may have peaked they certainly haven't started t drop rapidly. Also the historic data shows that the co-relation between initial and continuing claims is breaking down. Suggesting that when people lose their jobs now they have a harder time getting them back. This would be consistent with a service based economy versus manufacturing. Service sector loss of jobs are also associated with closing of the business.
Student who graduate but do not find jobs do not get to file for unemployment benefits (you have to be insured employed and lose your job.) They do get counted in the household survey.
As CR has pointed out, inventories have not yet caught up to the drop in sales.
.....realize that for all intents and purposes, increasingly tens of thousands have stopped receiving unemployment checks starting the first part of this year.
.....first, the "home ATM" disappears; second, the last of the remaining credit cards get pulled or maxed; thirdly, the unemployment checks stop - I'd be about at the end of my rope if I were in the same boat as many in America........
+10 - this is a balance sheet recession - in addition to the sectoral changes noted by crazyv (service economy vs. manufacturing economy)
CR,
"There is a reasonable chance that claims have peaked for this cycle, ...."
With the next wave of layoffs from:
Car companies and all their downstream suppliers
State employment (see CA for instance)
Plus no consumer demand for goods
What are you looking at that makes you say that?
conspiracy lovers, i found a great article for you. re: the bilderberg meeting (starts today) and their plans for the world economy (long stagnation or short/deep depression). see link
Pension Pulse: Will Bilderberg Sink the Global Economy?
oh, and the Bilderberg report assumes US unemployment will reach 14% by year end.
The economic situation is much worse than 1930 and the consequences could also be much worse. Unemployment might even hit 30 percent because there are very few replacement jobs available. Back then jobs were literally shovel-ready and required little training.
there will be a huge surge in gainful employment the rest of this year. The census is coming! very bullish.
Has anyone seen any analysis of how all the mandatory unpaid leaves of absence are affecting these numbers? I know in my state people who are furloughed can apply for unemployment benefits for leaves as short as two weeks. A lot of these people are very very slightly underemployed, but are collecting benefits.
It does not end there. The unemployment rate exceeded 14 percent for five more years until finally dropping below 10 percent again in 1941.
This Is Not Another Great Depression - Freakonomics Blog - NYTimes.com...
I didn't see a single reference to U3 or U6 in that entire article. More lying with statistics.
".........they will be counted if they give job related reasons for their current circumstances...."
...........I can introduce you to a thousand plus Nam vets just right here in this small town that have said "EF It" - and dropped out of all rolls such as these - no question. There is no "neat & tidy" to it. There IS subterfuge, deceit, and under-reporting.
wow, faculty let go? must have been untenured or adjunct. one of the signs of the bottom will be when the mid- to high-level educational administrators are axed.
Amen to that. A lot of districts in my area are laying off untenured teachers, consolidating positions, instituting hiring freezes, etc ... but many of these same districts post salary information online, and the sheer number of administrative positions - never mind the salaries! - beggars belief.
Our district alone - with just a couple thousand K-12 students - has a superintendent, an assistant super, six principals, three or four assistant principals, a full-time IT manager, a full-time custodial manager, two full-time curriculum directors ... and on and on, ad nauseum. Not one of them directly involved with teaching students or with maintaining the schools.
And comparatively speaking, our school taxes are pretty reasonable. I can only imagine the layer of fat ripe for the cutting from the school systems in places like CA or NJ.
BSR,
They will use illegals to fill in the gaps of under reporting. Pelosi approved them as great patriots. Stats will be loaded.
".........they will be counted if they give job related reasons for their current circumstances...."
Gave these reasons to whom?
I was out of work once for long enough for the benefits to run out, and nobody came around asking me for the reasons for my circumstances.
wow, faculty let go? must have been untenured or adjunct. one of the signs of the bottom will be when the mid- to high-level educational administrators are axed.
Those administrators hope never to get that far, which is why the first public cut proposals involve closing prisons and releasing rapists into your neighborhood.
How is that for extortion?
.....first, the "home ATM" disappears; second, the last of the remaining credit cards get pulled or maxed; thirdly, the unemployment checks stop - I'd be about at the end of my rope if I were in the same boat as many in America........
But, they've still got a sense of false-entitlement, combined with all those guns and ammo they were persuaded to buy, and it can go one of 2 ways...
They can go sell the arsenal for grocery & rent money and last a little longer, or go out both barrels blazing.
dont worry the markets are green!
But, they've still got a sense of false-entitlement
As opposed to the true sense of entitlement that is the possession of directors and officers of too-big-to-fail banks.
Both barrels blazing, indeed.
Any guesses as to how the C (and impending GM) bankruptcies will affect these numbers?
Elmo: You rang?
Nantucket,
Thanks, interesting link.
UAW workers file for unemployment and collect a supplement to that through the union from something called the Sub Fund, so they will be showing up in the unemployment stats. The Sub Fund my not be in the best financial shape at this time. The Job Bank was an entirely different animal and is dead.
State and municipal layoffs are already happening. In Wisconsin for instance, 1100 state emplyees are being layed off with everyone else getting 16 days of mandatory unpaid leave. I believe this is just for starters as tax revenue is shrinking here as fast as everywhere else. A hiring freeze has already been in effect for over a year at the state level and many municipalities. When the larger states start their layoffs the numbers should be interesting. Not good for PCE.
875, Where art thou?
I must add, that in Wisconsin, state employees will not be able to collect unemployment compensation for mandatory unpaid leave.
They will use illegals to fill in the gaps of under reporting. Pelosi approved them as great patriots--
A painter from Bavaria had a similar idea about blaming racial groups; it helped pull his country out of an economic decline.
Red herrings come in all colors nowadays.
bleh said, ".. my crystal ball says buy stocks in online unversitys."
I was just thinking that eventually a state government will buy an online college and offer it's classes for low or no charge.
Beware the I.E.D*'s of May
"Yea though I walk through the Valley of the Shadow of Debt
I shall fear no default rates; for thou art with me
Thy printing presses and thy stress tests comfort me
Thou preparest a bull market for me in the presence of Roubini, Taleb, and Grant
Thou anointest my portfolio with liquidity; my wallet runneth over
Surely bonuses and bailouts shall follow me all the days of my life
And I will dwell in the house in Greenwich forever.
A-Ben"
-- Colin Negrych
found it in "The Death of Kings: Notes from a meltdown" by Nick Paumgarten in this week's New Yorker
Nick Paumgarten: The Valley of the Shadow of Debt: News Desk : The New Yorker
Half a league, half a league,
Half a league onward,
All in the valley of Death
Rode the six hundred.
"Forward, the Light Brigade!
"Charge for the guns!" he said:
Into the valley of Death
Rode the six hundred....
What happened to my green shoot? That shoot is black!
Fire Bernanke now!
This is No Country for Old Ben
Green Shoots: Eat a couple of cans of pea soup, followed up with some ipecac syrup.
I just read through last night's comments about Arnold selling public parcels of land to fund his crack habit I mean budget deficit.
First thought that comes to my mind is that this will produce a backlash from the public that he is not counting on. It will be terrible and it will produce an angry, lasting bloc of voters who are against anything he tries to do involving the budget.
Second thought that comes to my mind is the old addage that every crisis is an excuse to loot by the rich.
adornosghost,
The term I used was "illegal" and did not identify a particular race. It includes all illegals. Your wish for it to be racest says you have a problem.
"875, Where art thou?"
Patience, Daniel-San. We may need to bump into 888 a few times from below. Took a few mini-bounces off of it yesterday before we submerged.
Though Zimmerman had his streak stopped last night briefing.com's remains intact.
Joe Dimaggio's doesn't stand a chance.
Ex-pat arty Austrian strongman as leader...
been there, done that.
So it will not be a depression, just feel like one.
Vader,
The method of calculating official unemployment statistics was dramatically changed in the 1960's and again in the 1990's. It's virtually impossible to directly compare numbers generated in the 30's with the [mis]calculations used today. Consider just the changes to the Current Population Survey: How the Government Measures Unemployment
"There is a reasonable chance that claims have peaked for this cycle,"
Snag is, this ain't a cyclical recession, but a systemic one.
The Californitania is listing heavily towards the TARP, after taking a couple of torpedoes from a wolf-pack of sub-primes...
a friend of mine is a teacher at a high school in sunnyvale, ca.
Not the most expensive school district in the bay area amazingly, but one of the higher ones.
He told me the teaching secretaries union actually negotiated a raise or something last year and that the secretary for their principal was making 80k a year based on the new wage scale.
So more than all the teachers. Their IT people apparently get paid loads of money to sit around and really not do anything (or as my friend says, screw up all of microsoft exchange so it doesnt work with outlook...)
I mean their IT lackey types make in the 70s with all the good benefits and pensions (I have met some of them through him).
I work at a company that automates IT administration with software .... so I'm fairly familiar with how much the IT grunts who say plug computers in and roll out patches make at companies all over the country, and 70k ish with pensions and really good healthcare for a lackey and not an admin is generally pretty generous.
They also have a union I believe, and a lot of it is they get some sort of raise every x number of years experience. It doesn't take much to roll out say windows patches and plug computers in, but some of these guys after 20 years are making far more than private sector for similar work. Granted I'm talking about one very high paying school district in a very high living cost area but I think there are plenty of areas they will find to cut.
15,000 jobs to go at BT
Another 15,000 jobs to go at BT • The Register
File under Holy Chit batman.
Hunton & Williams Law Firm -87
American Woodmark Corp. -30
Cochella Valley, CA School District Update -249
Griffin, WA School District -20
Burlington County, NJ -50
Chico, CA Unified School District -100
Yucaipa & Banning, CA Schools -32
Romoland, CA Schools -14
Moreno Valley, CA School District -135
Newark, CA High School -57
Berrien Springs, IN Special Ed Dept. -9
Parmadale, OH Treatment Facility -55
BT Global Sevices -15,000
Wartsila Corp. Worldwide cuts -450
Val Verde, CA School District -120
Jet Airways (India) -120
University of Washington Athletic Department -13
Colfor Manufacturing -600
Washington State Dept. of Fish & Wildlife -76
Mt. Diablo, CA area schools -400
Lucia Mar, CA School District -95
Deer Valley Lodging -119
Fish & Richardson Law Firm -120
Dayton, OH Sheriff's Dept. -15
To my mind, the most significant “green shoot” we have seen in the economic data was the topping out of the four week average of initial claims for unemployment insurance in early April. In this regard, I find today’s data deeply troubling. New claims rose by 32,000 in the last week to 637,000. This caused the four week average to rise by 6000 to 630,500. While it is still well below its peak of 658,750 this reversal of direction is distinctly unwelcome. Historically the four week averages peaks right around the point where the National Bureau Of Economic Research (NBER) eventually gets around to dating the end of the recession. Because of this, it is important to watch the number like a hawk.
Think of initial claims as a river running into a lake. The lake is continuing claims. There are two rivers that run out of the lake, one that leads to happiness and the other to despair. The happy river is when continuing claims fall because the person got a new job, while the river of despair is when the unemployment claim simply runs out and the person is left with no income at all. The data does not directly tell us the flow rates of either of those rivers (the monthly jobs report helps answer that question). However, in any case it looks like both rivers are partially dammed up right now. Every week the level of continuing claims rises to a new record, flooding the shores. This week it stands at 6.56 million, and increase of 202,000 in a single week. To some extent that may be due to extensions of unemployment benefits due to the stimulus bill. That has helped to slow the flow into the river of despair. However, it also seems to be due to a lack of new jobs being created. The river of happiness appears to be a trickle, and is not available to irrigate the green shoots of the economy. The graph below (larger version available at Blogger: Page not found shows the level of continuing claims as well as the four week average of new claims.
If you look very carefully, you can see the dip at the end of the blue line. However, note that it is possible to have false signals, for example look carefully at the way up in the 1982 recession, it was not a smooth line. I would also note that in the last two recessions, the four week average did not move straight down the way it did in earlier recessions, rather it moved off a peak and then sort of plateaued. Thus even if this does not turn out to be a false peak, it does not mean that happy days are here again. I would expect a rather large Mesa to form even if we have seen the actual top tick in the series. There are a huge number of obvious sources to cause initial claims to start to rise again. The most notable of these are the effects of the Chrysler bankruptcy and the very high potential for General Motors (GM) to follow. This not only causes layoffs directly at GM, but throughout the country. Just this week A.K. Steel (AKS) announced that it was closing a mill in Kentucky which will cause 750 layoffs and Arcelor Mittal (MT) will close a steel plant in Indiana causing 1,000 jobs to be lost. Even under the out of court restructuring plan, GM is going to shut down over 2000 dealers. If you assume 50 people work at each dealership (salesmen, mechanics etc) that adds up to 100,000 jobs right there. State and Local budgets are also under severe stress and that may cause very significant layoffs of teachers, firefighters, prison guards and social workers (not to mention even longer waits at the Department of Motor Vehicles). Yes the stimulus package helped a bit there, but it has only partially filled the hole. The four week average is a key indicator. Watch it closely, since it could go either way at this point.
As others have already stated, the dealership crash will be another blow to this recession and will probably jumpstart the downward spiral again unless someone start hiring a lot of people.
...the first public cut proposals involve closing prisons and releasing rapists into your neighborhood.
That's going too far. Will the public stand for the releasing of Goldman Sachs employees into their neighborhoods?
"The unemployment rate exceeded 14 percent for five more years until finally dropping below 10 percent again in 1941."
Is there a formula for determining if historical analogies are relevant?
I read an aphorism recently: Things that happen for the first time happen all the time.
'...layoffs of ... firefighters..."
Just let it burn because we can't afford not to?
A painter from Bavaria had a similar idea about blaming racial groups; it helped pull his country out of an economic decline.
Where is it written that "illegal" equates to race? No one said that.
'...layoffs of ... firefighters..."
It's not the working wages, it's the retirement packages that are killing cities. LA spends more on the past retired than on the currently employed. "Fully funded" plans aren't.
The roof the roof the roof is on fire
The roof the roof the roof is on fire
The roof the roof the roof is on fire
We don't need a special election let the motherfker burn
Burn motherfker burn
"It's not the working wages, it's the retirement packages that are killing cities."
If anyone ever deserved a fully funded retirement package it's a firefighter.
"A painter from Bavaria had a similar idea about blaming racial groups; it helped pull his country out of an economic decline."
He was an Austrian. He didn't pull his country out of a decline so much as put off the inevitable decline by edging towards war. His was a state the salvation of which was to be plunder and conquest.
It's fair that if someone just wants one magic indicator, this one (peak of initial claims) is a likely candidate. But....as CR says, we can't be sure yet that was the peak.
Has CR posted new job creation? (note: we most often hear net jobs, or net employment, change). I think the graph of new job creation would be rather interesting.
Pavel writes: If anyone ever deserved a fully funded retirement package it's a firefighter.
Saying "hail the glorious workers" is hardly an argument, Pavel. We all deserve a fair wage and funded retirement.
How about some data. Here's a snapshot from the Orange County Register: Last year OCFA's 814 firefighters, engineers and captains earned a median annual pay of $137,784... Interviews and records show that a key factor behind the growth of overtime is the enhancement of pension benefits granted to firefighters in 2001. The pension benefits have boosted the cost of each firefighter dramatically, simultaneously discouraging the agency from new hires and encouraging more early retirements.
"If anyone ever deserved a fully funded retirement package it's a firefighter."
I disagree. Expecting private employees without any retirement package to pay for a "fully funded retirement package" for any public employee is not politically viable. Yesterday's announcement that the recession is continuing to drain funds from SS and Medicare, shortening the time until they are busted, makes this clear. As states and municipalities go bankrupt, every contractual promise will be renegotiated or flat-out broken.
You may disagree, but anyone who risks his life to save ours is worth every cent he gets. What's your life worth, DC, fried?
Many firefighters' early retirements are caused by serious disability.
"Rajesh, I can manage!"
CR,
Another nice graph might be the size of the "revised" adjustment they make week-on-week and month-on-month.... just to get an idea of the size of the con.
"Many firefighters' early retirements are caused by serious disability. "
Boston firefighter's bodybuilding success comes at a price
Perhaps this is the exception that proves the rule......
Pavel, I'm ex-military, so I don't need more examples of people who have risked their lives and often get butkis. But you need to tell me your number of what is "fair": using your argument, any number is fair. (And I'm assuming you're for raising our taxes to fund these exploding costs, then? No free lunch, dude!)
As for me, I suck it up and use the "knew the job was dangerous when I took it" approach; the true workers just want fairness. The scamsters want an open spigot.
Ok, so I am way late, and you have all scurried off to the next thread. But...
CR - At the risk of saying "this time is different", what may be different this time is that the creation of new jobs is far slower than in recessions past. In other words, in past recessions, the peak in initial claims may have coincided with near-end of the recession because the rate of new job creation was fast enough to reasonably quickly bring down the U3 and U6 numbers. One would think that the recession ends when in aggregate we have more jobs, which is a function of the input (new jobless claims) and output ( new job creation).
But what happens when the rate of new job creation is so slow that the U3 and U6 number linger at the highs even as initial claims fall? Why would this happen? Due to excruciatingly slow job creation.
So... I wonder what that graph looks like overlaid with U3 and U6 numbers?
Regards,
Ham (not green) Poops
(btw the HamPoops handle is from a late evening thread way back that still makes me chuckle)
A strong retirement system is nigh mandatory to increase the velocity of money (too much savings is always a problem) and to get people to quit working so people with minor (near college age or younger) children can be promoted
What killing us is the evil trio of other nations merchantilism , wage arbitrage and the dirty secret that we don;t make enough real wealth-- fix those, relfate wages and we will be fine.
The term I used was "illegal" and did not identify a particular race. It includes all illegals. Your wish for it to be racest says you have a problem. - LBD
"anyone who risks his life to save ours is worth every cent he gets. What's your life worth, DC, fried?"
This is a dead thread,but the chance of serious disability or death is part of the job description. Industrial accidents happen often as well...check out the stats on meatpacking plants or coal mines...Combat vets face even worse odds on the job...do they get a "fully funded retirement package" ? Am I to assume you took to the streets to express your outrage when McCain led the fight to kill a new GI bill last summer?
Excising the word "deserve' would be useful, as there is no money to pay for these packages...for cops, firemen, teachers, or public health workers.
What my life is worth to me is no concern of yours, old man. Take your ugly attitude and stick it.