Weekly Initial Unemployment Claims: 530 Thousand
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CalculatedRisk on Thu, 10/29/2009 - 5:50am (108 comments)
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First, the simplest proxy measure for government's involvement in an economy is the metric of government spending as a percentage of total economic output (Gross Domestic Product, or GDP). This Government Spending/Total GDP metric isn't perfect, as it doesn't cover other important factors such as tax rates, inflation and monetary stability, the regulatory regime, or levels of human and physical capital. Nonetheless it captures the size of government's "footprint" in an economy to a fair degree. And the first observation here - so prevalent that it may be regarded as a canonical law of economics - is that there is a significant inverse correlation between the size of this government footprint and GDP growth (and, by extension, standards of living). This is true beyond any timeframe other than the very short run. Communist economies, where government's footprint is biggest, exhibited very slow growth across the 20th century. But European welfare states do not fare well, either, in comparison to the growth engendered by the more limited-government policies of, say, Hong Kong, the U.S., or pre-1990 Japan (after 1990, Japanese government spending accelerated dramatically, and economic growth stalled). More recently, the People's Republic of China has witnessed strong growth only as rising economic liberalization, greater levels of foreign direct investment, wider property rights, and significant market-based reforms became policy.
first?
and i may be second, i might have to revise that at a later date
Would somebody please send CR some donuts? He's moving too fast again.
Somebody send me some, too. I have work to do.
Revise it down to seventh.
The key here is job creation, and there doesn't seem to be an engine for that at the moment. It also doesn't appear as thought this administration has any plans in the offing to help businesses with that either.
wider property rights in China while ours decreases? uh-huh and this data point from bloombergs report on GDP numbers:
Homebuilding Rebound
WHAT?
http://www.bloomberg.com/apps/news?pid=20601087&sid=a_bD4gJ8o4wc
This was posted in a previous thread but certainly is germane enough to post again: Labor's Share:
http://economistsview.typepad.com/economistsview/2009/10/labors-share.html#comment-6a00d83451b33869e20120a63051a0970b
Nanoo-Nanoo wrote:
Do you not believe that property rights have been increasing in China while our rights have been decreasing?
On the home-building rebound, after the debacle of the last year or two, just about any building looks like a rebound, but in comparison to 2005, it still looks like a dead cat bounce. Furthermore, any increase in consumer spending (which I'm skeptical of in any even), is the result of massive stimulus, and that can't last forever.
,rads,
2 million+ jobs are being lost each and every month, but it's ok as long you extrapolate the GDP numbers in such a fashion as to cook them, parboiled.
LOL
More:
Potempkin GDP?
I wouldn't call it a sharp decline.
digalert wrote:
You need to adjust your "spin-o-meter"
Meanwhile, in the real world:
Recession sends boutique owners packing - Chicago Tribune
When Amy Lechelt-Basta opened her clothing boutique, Ciao Bella, on Southport Avenue three years ago, the quiet North Side neighborhood was exploding with new stores and pricey condos.
Now, after a summer of sales so slow she could no longer cover her costs, Lechelt-Basta is closing her shop for good Sunday and turning her attention to a more recession-worthy endeavor: a closet makeover business that helps customers get more wear out of their existing wardrobes.
Economists say the Great Recession may be at an end, but its effect on independent retailers has just begun. In a scenario that is playing out on Main Streets across the country, Chicago's burgeoning boutique scene is in upheaval.
A growing number of independent retailers who made it through the grim holiday season of 2008 are shutting down instead of sinking more money into new inventory, worried that this holiday will be no better. Others are cutting hours of operation, stocking goods under $100 and literally going the extra mile to make a sale by personally delivering some purchases.
While boutiques come and go in good times and bad, they have never been equipped to compete on price with big national chains. And these days bargains rule.
"This recession is different," said Lechelt-Basta, a 25-year-retail veteran. "People are trying to negotiate more. In a boutique, you really don't do that. Making a 20 percent discount is not going to make or break you, but if you're doing 20 percent every day, it's painful. People are waiting for 40 to 50 percent and then they ask for more."
What can we believe?
Stimulus jobs overcounted nationwide - The Denver Post
thats okay this is going on next months
shaw industries layoffs - Google Search
OWNERSHIP is discouraged in the USA-China owns a boatload of those GSEs as does Japan. What do we own?
I fully expect a market pop on the hopium despite tons of data to prove the opposite. What a freaking mess.
Ever look at the numbers of people employed in AG during the 50s & 60s vs now?
Santelli was just saying that the NSA numbers on claims were up 32,000 for the month.
Eric wrote:
Which is why the economy's simply making a short climb up the peak in the middle of the "W." The small business owners who are just barely hanging on, won't be able to keep doing it. They, and others like them who are burning through reserves simply to maintain altitude, will push us into the second leg downward when they finally go bust, cease activity, cease consumption, and so on.
500k people got fired last week
500k people got fired the week before that
500k people got fired the week before that
500k people got fired the week before that
500k people got fired the week before that
500k people got fired the week before that
500k people got fired the week before that
Hmm....
GDP rally will last 5-10 minutes on the open..then dollar will spike and dollar shorts will continue to cover...another negative day for Equity's.
nsa? im confused.
Not Seasonally Adjusted.
I've haggled all over the world, and had previously held the belief that my fellow citizens had no clue how to bargain, but they are surprising me nowadays...
When I hear about negotiations @ the checkout with the checker over the price of a bunch of bananas, i'll know we can compete with anybody.
Looking like a pattern to me but what do I know compared to those who say the worse is be behind. Don't look know but it's a train coming.
Homebuilding rebound, not in the south, southeast. Granted July and August were up <10%, due to tax credit but September was off 4% from August. As a manager for one of the larger electrical contractors (primarily residential construction and light commercial construction) with offices in 23 metropolitian areas across 7 states, I can say with some confidence that homebuilding is not rebounding.
Mr Slippery wrote:
Thank goodness for the Birth-Death model. Otherwise, we'd be in deep doo-doo-
MarketWatch headline stimulus kicks in, CNBS having on air orgasms.
mr slippery
thank you so much i just couldnt figure out the national security had to do with ue.
We're all being terribly churlish.
The fabulous GDP and marginally reduced weekly jobless are a tremendous success for our command economy.
Thank you jpb: Total unsupportable silliness in that number.
OT: Visiting downtown Charlotte, NC, and looks like they didn't get the memo about the CRE bust yet -- the downtown just opened a Ritz-Carlton hotel (across from a "W" branded hotel, across from an Onmi, across from a...), and construction cranes are still active, unlike San Diego -- I saw one work crew doing a concrete pour on a roof at 11PM at night last night., almost like they were in a hurry.
Since Charlotte has become a second NYC with respect to having lots of banks/financial, I'd say it looks like people are betting there are more good times ahead for the sector once this small "rough patch" is over.
digalert wrote:
Maria Cabrerra-Carusso by any chance!?
Heard on local radio this morning: Atlanta has a 12 year supply of vacant office space assuming a return to robust growth and no further building.
Sometimes when the truth is so awful, you take what is in reality, probably a GDP that is down 3.5%, so you just flip over the results and call it up 3.5%.
Like getting an F grade, and switching it to a an A.
When I hear about negotiations @ the checkout with the checker over the price of a bunch of bananas, i'll know we can compete with anybody.
You haven't met my mother in law, I presume.
dcrogers
well they sort of have to dont they they home of one of the great 19tbtf, so maybe they figure they really have nothing to worry about, but then again the"queen city" has always had an attatude. ps im originally from greensboro
Why do these charts always resemble ECGs, as if this were a normal rhythm?
I'm waiting to see the CDC FluView report which should be released tomorrow...
Because now its focused on brain waves instead of heart rhythm.
,rad DCR,
Keep in mind that for all of the these construction guys, they know it's the last steady work they are going to get. Not unlike in the shipyards of South Korea, where they are building yet more unneeded cargo ships, all under contract.
The machine slowly dies, but it takes a while for the bulkheads to cave in...
I've been following that very closely and technically since last year (I like epidemiology academically). Even without severe illness, this flu go BOOM here in the US. It will have a tangible affect on the economy but it will be used as a tool to obscure bad fundamentals when reports of retail sector weakness, etc. come out. Some of it will be factual but its gray and easily manipulated.
Yes I too am interested in that report.
Also, re the CRE not crashing visibly in Charlotte yet, I believe CR has mentioned those projects are planned for years in advance. That would mean they would stretch out into any downturn. Correct me if I'm wrong.
Cinco-X wrote:
I sure as heck do. In China, control of the means of production, is slowly moving from the government to private enterprise and in the US it is moving from private enterprise to a connected, monied few... Just take a look at the results of McCain's Internet Freedom Act...
http://i.imgur.com/5RrWm.png
I don't expect Charlotte to participate in the CRE bust quite yet.
As late as Seattle and Portland were to the 'party', Charlotte was later still to see evidence of RRE problems, and it didn't show many other signs of the national downturn - falling home prices or sagging employment - until long after our most obvious examples had become poster children. I'd be glad to see them spared the worst of all this, but think they're 'for it' in a quarter or two.
J. Wellington Wimpy says: "I will gladly repay you forever and ever, with interest for 0.8 GDP points today."
500k people got fired last week
500k people got fired the week before that
500k people got fired the week before that
500k people got fired the week before that
500k people got fired the week before that
500k people got fired the week before that
500k people got fired the week before that
Hmm....
it's actually more like 50K/week (approx. 7K+/day), but still ~
The advance unadjusted number for persons claiming UI benefits in state programs totaled 4,968,019, an increase of 51,445 from the preceding week.
ETA Press Release: Unemployment Insurance Weekly Claims
Report
Do these studies ever take into consideration the "level" of GDP or level of per-capita GDP. They only look at the 1st derivative and draw conclusions.
What if TPTB were to seal our borders, to quarantine fiscal influenza?
nanoo-nanoo
and say isnt it lucky how it came about at this time.
uh huh it will take our minds off. fear,greed and loathing.thats the name of the game. of course i could put on
What if TPTB were to seal our borders, to quarantine fiscal influenza?
Don't need to: "It's contained!"
Well, I'm going to need more that that...more like affordable
AP IMPACT: Stimulus jobs overstated by thousands
STIMULUS WATCH: Stimulus jobs overstated in report - Yahoo! Finance
I see the inflation of Norway as the first engagement in the battle of finance, next stop:
The Loan-Lands
.....First, I didn't know they HAD, but speaking of continuing claims? YES, if people are constantly being pushed off the backside of the "claims" wagon. If 6-people are standing on the edge of a cliff, and I push the other 5-off the edge, how many does it take to call it a "continuing decline"?
....it's freezing......I need warm coffee and a hot cow........er, hot coffee and a warm cow....
thats the problem burnside, it will not go down all at once,its going down in fits and starts(i think ours might be getting started here) i would really get things over with all at once.even this but thats just me. this way it will take forever.imo
@Eric
That story from the Trib is happening in spades all across america.
possibility very much so. anyone read national emergency act. we have a national emergency with j1n1 now.so yes nevermind totally missed the fiscal in the sentence. but it could be used.
That story from the Trib is happening in spades all across america.
Oh, no shit. That one just happened to mention a bunch of neighborhoods within walking distance of my apartment.
When we were selling our house out in the far western suburbs this spring, the strip malls right around it were definitely going tits-up. I'm just glad we unloaded that boat anchor before everything hit the fan out there. Hard to sell your house if the only grocery store for miles is having a going out of business sale.
The headline GDP number was better than I thought it would be. That said, I still think it was a lousy report. The devil is in the details:
First, the GDP report includes massive government spending, but ignores the cost of the debt associated with said spending.
Second, personal income excluding government transfers is down 7.6% from 2007! Additionally, personal current taxes were down 28% from 2007 (big, big deficits).
Third, real GDP growth from Q3, 2008 was negative 2.3%.
Sure we had a nice bounce off a bottom, but only after taking on trillions in new debt. We mortgaged our futures to bailout trillions of bad debt and all we have to show for it is is a slight bounce. WTF! How can any sane person cheer for this kind of fraud.
Alot of the recent data suggests that no sustainable recovery in housing is imminent and, that structurally, unemployment has some permanent qualities to it now, in the sense that many industries in the US are simply not going to return to credit bubble levels.
km4,
Detroit is the future for many of us.
Outsider wrote:
Yes, certainly -- my point was simply a comparison of the nearly-complete shutdown of construction and the halting of opening new hotels I have observed in San Diego, as compared to the ongoing construction and openings here. Perhaps I'm just comparing "dead" and "dying" -- but it's pretty perky-looking on it's death-bed!
,rad BSR,
Across the river from us, a grass-fed cow awaits it's date with the mobile abattoir in a week's time, and it ends up in our deep freeze, en route to the BBQ.
"So many people are deluding themselves that we have some sort of durable recovery on our hands and yet consumer confidence, at 47.7 in October, is unbelievable — the lowest this every got in the 2001 recession, which included the 9-11 terrorist attacks, was 84.9. Think about that for a second. If the equity market is catching on to the view that we could be in for some slowing in the data, then a significant correction after a 60% surge is very likely. "
From David Rosenberg this morning.
dfwmix wrote:
Near the end of the article:
When will David Rosenberg get with the program?
face it y'all we are screwed,have always been screwed but do the powers that be have to be "in your face"with it.
Meta-comment.
What we are doing now with the economy is what in the aerospace industry used to be called "flying the instruments and not the aircraft."
"flying the instruments and not the aircraft."
+1,000
,rad Dawgma,
What's not to like about a flat spin?
rob dawg
i think i understand that, in other words you are not listening to what the aircraft is telling you,you are watching the instruments.
that is so correct totally correct. we're the aircraft,and congress is the pilot,and the instruments are the economy,the fed and all the other crap.
Your children do not belong to you
The Nationalization of Your Children - Mark Steyn - The Corner on National Review Online
This is insane.
What we are doing now with the economy is what in the aerospace industry used to be called "flying the instruments and not the aircraft."
Rob Dawg,
First and foremost, we are preserving trillions and trillions of bad credit issued by a venal banking system.
We should have deflated this sucker back down to the 2003 level. Then, stimulus efforts could have a real impact and not just be used to preserve the value of fraudulent credit.
Well as a lowly US citizen, I certainly feel like a tool.
i want to be a hammer
nanoo-nanoo
are you a peasant too, i am. a peasant not a pheasant. i get confused.
I suppose if you heard the stall warning indicator all the time, you'd just disregard it eventually...
gabyjan wrote:
Hammer she wanted...
Screwed she got!
... I don't work there anymore.
gabyjan, what we need are great big sickles: The only way to kill
zombies and 
vampires is to cut off their heads.
I look at towns which make up the greater Charlotte conurbation and see both Rock Hill and High Point with toe tags. By now a familiar pattern, surely.
3.5%? How could
be so wrong?
they wont grow another head or two will they
rog dawg
oh i walked into that one didnt i. its true that as you get older you get slower.
burnside
no,no,no high point is greensboro, they can have winston-salem
Over time, this economic growth differential drives gaps in other such standard-of-living metrics as per capita income, or unemployment. Per capita income in the U.S. was over $44,000 last year, versus $32,000 in France, for example
We'll know Wall Street fatigue has finally set in for real when the MSM starts (properly) reporting the median instead of the mean for these kinds of numbers.
The fact that we're paying (literally "we", the taxpayers) tens of billions' worth of income to keep the vampire squid and their brethren on Wall Street in Gulfstreams and Bordeaux gives the 'Merican average a nice little bump, but I doubt it's otherwise a source of chest-bumping pride to too many folks these days.
No problem. Remember our motto:
"Age and Guile Beat Youth, Innocence, and a Bad Haircut" - O'Rourke
3.5%? How could
be so wrong?
"Under-promise and over-deliver." That's the Goldman motto.
Oh, and something about loading up on SPY calls in advance. Pretty sure that's in there too.
CK: Old, old selling tool-lower estimate and deliver better. This is pure propaganda for the equities market and JUST the equities market. The rest of us are just 'collateral damage'.
Beat me to it Mook!
is that robert o'rourke?
P.J. O'Rourke (Harvard Lampoon and beyond)
Jobs credited to the stimulus program were counted two, three, four, or even more times. The government has overstated by thousands the number of jobs it has created or saved with federal contracts under the president’s $787 billion recovery program, according to an Associated Press review of data released in the program’s first progress report.
Job count flawed in report on stimulus - The Boston Globe
Rob Dawg wrote:
Exactly.
BTW - one of the problems w/ expecting employment bumps from stimulus is a lot of those sectors have been improving productivity for years... example - been watching road crews in my area mostly to see what equipment they use & who I should be calling on... one observation... the process is way more automated & capital intense than just a few years ago. The machines doing asphalt grinding up and then resurfacing only requires a few people to run the whole thing and the machines work FAST. My guess is in a day they can do with a crew of say four what it used to take a crew 12 to do in a week.
Multiply that across many sectors and you see billions of dollars of stimulus resulting in a big GDP increase [stuff done] but a paltry few jobs.
And in mfg its worse - we don't even want the bodies on the factory floor - they get in the way of the machines... just need a few to program & set up then load/unload product. And with business system automation ripping through the office - we'll be able to continue to empty that part of the building too.
I don't think anyone fully understands exactly where we are on this curve.
So the recession isn't really over then...I was all ready to celebrate until I came to CR this morning...
okay thank you i ve read him not lately
Oh goody, I was just told stocks will rise to record prices within two years on another forum....I finally get my
"Under-promise and over-deliver." That's the Goldman motto.
So true. Didn't they just downgrade a few days ago so they could have a healthy beat?
Comrade Kristina wrote:
By the numbers it probably is and since that's all the 'official recession keepers' worry about so I think it is safe to...
Ding, dong the recession's dead!
So we can expect...
-the government to get out of the housing market
-let rates rise to market levels
-not give more billions to GMAC
etc, etc, etc...
..........................................................................................................................still waiting.
Dang, I've got to go get $$s, my monthly allotment of high fructose corn syrup, increase my stash of toilet paper and get the flu in the process of gathering my doomer supplies. Hopefully I won't get attacked by a zombie
or rabid :squirrel in the store.
Thanks to all for indulging me.
You have to love these "One Day Wonders"
oh you're welcome dear. think nothing of it.
So do we have
or 
today? In the all the excitement, I haven't checked yet. I'm assuming Erics puts are being ravaged...
U.S. rental vacancy rate rises to record 11.1%
U.S. rental vacancy rate rises to record 11.1% - MarketWatch
I'm assuming Erics puts are being ravaged...
A good assumption (along with SRS). My GDX seems to be getting off the mat though.
Comrade Kristina wrote:
They needed an up day to squash the shorts, so the lowered expectations-
And in mfg its worse - we don't even want the bodies on the factory floor - they get in the way of the machines... just need a few to program & set up then load/unload product. And with business system automation ripping through the office - we'll be able to continue to empty that part of the building too.
I don't think anyone fully understands exactly where we are on this curve.
Wherever we are - it's not just 'we' as in America. I had it drilled home spending two weeks in China earlier this month - we took the wraps off a brand new greenfield mfg. plant a few hours' west of Shanghai.
I don't know the exact acreage of the place but it's HUGE - a brisk 15 min. walk from one end to the other - and productive capacity will be twice that of our largest existing plant in Ireland.
But what blew my mind was that the Irish site was only opened 10 years ago, is remarkably efficient compared to our legacy operations, and still employs 2,000 - yet the new site in China will crank out 2x the 'stuff' with a staff of maybe 800 - about one-third as many.
And it's not like labor costs in that part of the world are a killer - but when you can get 6x the productivity from your capital, why wouldn't you, I guess?
Awe-inspiring, yes ... but taken to its logical conclusion it's frightening.
I would love to see this chart corrected for overall population. The peaks/valleys relationships would not change substantially, but the entire thing would change its tilt over time considerably, I imagine. Wonder where the raw data series are available....