Unemployment Claims: Record 6.8 Million Continued Claims

Submitted by
CalculatedRisk on Thu, 06/11/2009 - 4:42am (22 comments)
in
shill wrote on Thu, 6/11/2009 - 4:43 am

Nemo!

Rob Dawg wrote on Thu, 6/11/2009 - 4:46 am

It's pathetic to see the spinning heads argue the second derivative on a truly miserable 601k number.

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 576,695 in the week ending June 6, an increase of 76,312 from the previous week. There were 373,046 initial claims in the comparable week in 2008.
The advance unadjusted insured unemployment rate was 4.6 percent during the week ending May 30, an increase of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 6,127,413, an increase of 93,810 from the preceding week. A year earlier, the rate was 2.1 percent and the volume was 2,828,892. [emphasis added]

Eric wrote on Thu, 6/11/2009 - 4:44 am

(pigged, should have expected that).....

This is a great article: Daring Trade Has Wall Street Seething (possibly subscription).

Basic outline:

1) small brokerage in Texas finds a company with distressed bonds, $29 million face value
2) sells CDS to a bunch of Wall Street banks, in excess of $130 million notional, at 80-90 cents on the dollar
3) brokerage pays another firm to buy up the $29 million in bonds and pay them off in full
4) keeps the 85 cents * 130 million upfront payments.

Nice hand sir, well played.

Rajesh wrote on Thu, 6/11/2009 - 4:46 am

We will take out the 1982 percent of covered employment peak but I don't think we can reach the 1975 peak.

Comrade Coinz wrote on Thu, 6/11/2009 - 4:46 am

Incident Commander Coinz reporting for duty.

Assume Crash Positions wrote on Thu, 6/11/2009 - 4:48 am

~600k initial claims per week X 52 weeks in a year > 30 million claims per year. Granted, some people may well make initial claims more than once in a year, but even cutting the number in half would mean that more than 10% of the U.S. workforce of about 145M (ftp://ftp.bls.gov/pub/special.requests/lf/aat9.txt) is filing an initial jobless claim per year.

That sure looks like green shoots to me. 500 point rally to celebrate?

Angry Saver wrote on Thu, 6/11/2009 - 4:50 am

Eric,

That CDS story is awesome. Bernanke would likely view that as "wealth" creation.

When I play poker on Friday nights, a lot of money changes hands, but no wealth is created. Moreover, it's an honest game and no sham is involved.

Comrade Coinz wrote on Thu, 6/11/2009 - 4:54 am

The 600K initial weekly claims has translated into roughly 500K monthly net jobs lost (ignoring B/D adjustments), so that means on average 475K of those 600K are finding a new job by the end of the month. No matter how you look at it, it sounds bad to me.

Eric wrote on Thu, 6/11/2009 - 4:54 am (in reply to...)

When I play poker on Friday nights, a lot of money changes hands, but no wealth is created.

You must play with a more honest group of people than I do. Generally, if you ask people how they do at poker, a couple will say "they're killing the game", a few will be "doing well", and the rest are "breaking even".

Sounds like wealth creation to me!

Smile

RockyR wrote on Thu, 6/11/2009 - 4:55 am

It's awfully hard to look at this and not think that the worst is behind us for now.

TB Apple wrote on Thu, 6/11/2009 - 4:57 am

RE: Eric

This CDS story is akin to a bank robber complaining about getting mugged on the way to the getaway car.

burnside wrote on Thu, 6/11/2009 - 4:57 am

Is there a metric showing those working, say, two jobs who have lost one of them? Not eligible for UE compensation, but still out a job.

volker the viking wrote on Thu, 6/11/2009 - 4:58 am

"We will take out the 1982 percent of covered employment peak but I don't think we can reach the 1975 peak. "

Oh, I think we will.

RockyR writes: "It's awfully hard to look at this and not think that the worst is behind us for now."

Really? Maybe some would like to 'hear' your take on the s matter. I'm on the edge of my seat.

The Mortgage Pig wrote on Thu, 6/11/2009 - 4:58 am

Retail Sales in May: Off 10.8% from May 2008

Doc at the Radar Station wrote on Thu, 6/11/2009 - 4:59 am

OT, but related... The 1958 recession had the 2nd sharpest GDP decline from peak since WWII...

Update: What is a Depression?
Real GDP: Declines from Peak
http://cr4re.com/image/GDPslump.jpg

The 1958 Recession has the closest shape with respect to...

Percent Job Losses in Post WWII Recessions:
http://2.bp.blogspot.com/_pMscxxELHEg/SikR-KLSmvI/AAAAAAAAFco/JmojYnTrezU/s1600-h/EMploymentPercentLosses.jpg

The 1958 recession was a "sharp worldwide economic downturn"
Recession of 1958 - Wikipedia, the free encyclopedia

Just thought this was an interesting tidbit...

shill wrote on Thu, 6/11/2009 - 5:01 am

RockyR writes: "It's awfully hard to look at this and not think that the worst is behind us for now."

Crack for breakfast is no way to start a day off son.

ken melvin wrote on Thu, 6/11/2009 - 5:03 am

Thanks for making the covered claims distinction. Yet, again, the 680k represents at least 1,1 million.

ken melvin wrote on Thu, 6/11/2009 - 5:05 am

6.8 m = approx. 11 m ~ sorry.

jamiec wrote on Thu, 6/11/2009 - 5:24 am

I'm still wondering how the EUC numbers are handled. From the DOL report:

States reported 2,188,364 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending May 23, a decrease of 158,854 from the prior week. EUC weekly claims include both first and second tier activity.

And from the Tables below this statement:

PERSONS CLAIMING UI BENEFITS IN FEDERAL PROGRAMS (UNADJUSTED)

WEEK ENDING May 23 May 16 Change Prior Year

Extended Benefits 213,666 146,735 +66,931 0
EUC 2008 2,188,364 2,347,218 -158,854 0

Note the prior year number! So, do we add the ~2.4 million in Extended Benefits and EUC 2008 to the ~6.8 million headline number? If so, then we are reaching 1975 levels.

I suppose the good news, maybe, is that the EUC 2008 number dropped this week. Or did these poor folks just run out of time?

dilbert dogbert wrote on Thu, 6/11/2009 - 6:29 am

CR,
What do these numbers look like on a percentage of the workforce? I think that number would be useful in comparing this depression with the ones of the past. (Some call them recessions.)

gne1963 wrote on Thu, 6/11/2009 - 2:36 pm

It really isn't "too early to call" a peak. In fact, it seems as though it is unreasonable to think that initial claims have done anything other than peak...
Unemployment Initial Claims Peak Predicts Recession End

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