Archive for the ‘Unemployment Claims’ Category
Unemployment Claims: Back To Reality?
In the week ending February 16, the advance figure for seasonally adjusted initial claims was 362,000, an increase of 20,000 from the previous week’s revised figure of 342,000. The 4-week moving average was 360,750, an increase of 8,000 from the previous week’s revised average of 352,750.
The advance number of actual initial claims under state programs, unadjusted, totaled 346,428 in the week ending February 16, a decrease of -14,758 from the previous week. There were 346,659 initial claims in the comparable week in 2012.
So we have a reasonable actual .vs. “adjusted” number — heh, look at that!
What’s the big table look like?
Interesting — the EUC rolloff continues, now under 2 million total. This is very significant, but note carefully that there is yet to be any evidence that these “newly not-drawing-UE folks” are getting jobs. That, in turn, should be expected to show up in retail spending over the next few months, and not in a good way either.
But this week, which was the first post the February employment report, did show a nearly 77,000 drop in regular claim participants.
Call it a mixed bag with a mild positive bias for today.
CPI (Consumer Price Index): Some Like It Hot(ter)
The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in January on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.6 percent before seasonal adjustment.
The index for all items less food and energy increased 0.3 percent in January. This increase offset another decline in the gasoline index and resulted in the seasonally adjusted all items index being unchanged, as it was last month. Increases in the indexes for shelter and apparel accounted for much of the increase in the index for all items less food and energy, with advances in the indexes for recreation, medical care, and airline fares also contributing.
That woud be a 3.66% annualized increase in core, which ought to perk up your ears.
Let’s have a look inside at annualized increases, as we did with the PPI.
The first thing that stands out is that the “target” is “achieved” at a 1.9% core rate annualized. But….
Shelter, particularly rent, is up closer to 3% while hospital services are up 4.7% and transportation is also up 3%, with insurance up nearly 5%. The latter is a big perverse effect of QE, in that insurance companies make a fair bit of their money off fixed-income investments. That’s dead, of course.
If you like to eat, eat lamb. It’s down 15% on the year.
Don’t eat apples. They’re up 11%. Fruits in general are up 4.6%, and vegetables 3.4%.
Electronics continued their dive, with TVs off 17% on the year. Americanus Boobus has his idiot box for another year at an ever-lower price.
Don’t go to college unless you want a textbook shoved up your butt. Their price is up 8% on the year, and the best part of it is that your professor is probably getting a piece of it. That smile on his face? It’s because he’s assaulting you coming and going.
Computers continue their inexorable decline, as do other consumer information items (e.g. cell phones, tablets, etc.) Bye-bye margins.
And don’t start this crap about how “health costs” have “leveled out.” The hell they have. Health insurance is up 8.6% annualized, damned close to the 9% escalation that has been maintained historically over the last 30 years. If you believe that it comprises only 0.658% of the total amount of money you spend as a consumer, which is what the government claims, then you’re dumber than a box of rocks.
Can’t afford a car and need to ride the bus? That’s up considerably more than the so-called “inflation index.” Oh, and that’s a laugable 0.264% of your budget too. Really, for those who actually use it?
Those are the lowlights — enjoy.
Philly Fed: Now You’re F*ed
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from a reading ]5.8 in January to ]12.5 this month (see Chart). The demand for manufactured goods also showed slight declines this month: The new orders index declined from a reading of ]4.3 in January to ]7.8 in February. Despite negative readings for general activity and new orders, the shipments index showed improvement: The index remained positive and edged slightly higher to 2.4. The percentage of firms reporting increased shipments (25 percent) was slightly greater than the percentage reporting declines (22 percent).
That’s not good.
There was a small indication of stability — the number of employees basically was flat and the workweek only declined slightly. But….. there is no unfilled order backlog, new orders are declining faster, inventories are drawn down materially below the flat-line and the price paid/received spread is still the wrong way.
These indices have been screaming recession incoming for the last six months. That’s the average lead time — which means it’s here and now, and there are no policy steps remaining available to counteract it as Congress, instead of rationalizing fiscal policy three years ago has instead chosen to “support” phantom and fraudulent “demand” with deficit spending.
Buckle up and keep in mind the average declines in the market during a serious (and severe) recession when there are no effective policy tools available to attempt to counteract it.
Total nonfarm payroll employment increased by 157,000 in January, and the unemployment rate was essentially unchanged at 7.9 percent, the U.S. Bureau of Labor Statistics reported today. Retail trade, construction, health care, and wholesale trade added jobs over the month.
That’s from the establishment survey. Benchmark revisions are also this month (January), which means that the number is frequently full of “hair” and the headline has to be looked beyond — more than usual.
But even “sans hair”, there is little to cheer about — the employment rate did not go down and 157,000 — assuming you believe the number (and you shouldn’t, as I’ll get to shortly) isn’t good. The workweek was unchanged overall and down for production and non-supervisory employees, now standing at 33.6 hours. That is considerably below “full time, 40 hours” — still.
Average hourly earnings, on the other hand, was up 5 cents for production and non-supervisory employees. That’s about the only good news, despite claimed revisions for November and December (which likely are where the spooge-fest came from in the futures.)
That’s where the good news ends.
Here’s the table from the household survey, unadjusted, which is what I use and always have.
Notice that both monthly and annualized are now headed southbound. While annualized is still positive, it’s going the wrong way — and the monthly numbers are horrible.
How horrible? Employed dropped by 1.446 million people!
Now to be fair this is usual for January to some degree. But make no mistake folks — the layoffs this January were doublethat of last year, when January was -737,000. The idea that this report is “strong” is just plain crap — or if you prefer, a lie.
Not-in-labor force moved too — the wrong way. 423,000 gave up last month alone.
The benchmark revision also added massively to population, taking it up 313,000 people, which is about double the monthly average. If you want to look at employment including the change in working-age population it’s about 1,750,000 fewer employed, population-adjusted.
This is a serious deterioration and it showed up right here:
And worse, here:
We’re one tenth above last January in terms of the employment-population ratio.
In other words there has been no meaningful change in actual population-adjusted employment whatsoever over the last 12 months.
This report is a train wreck.
Discussion (registration required to post)
It’s time to cut the crap on this so-called “help” and call it what it is: Welfare, then take it out back and shoot it.
About 2.1 million Americans receive payments through federally backed emergency unemployment programs, which Congress adopted starting in 2008 as a temporary supplement to state-level programs funded primarily with taxes on employers, which generally offer six months of benefits. That number has tumbled from more than 3.5 million at the start of the year and a peak of more than six million in early 2010, reflecting not just the gradual improvement of the job market but also new limits that have pushed hundreds of thousands of workers off the rolls before they could find jobs.
These programs are simple welfare, nothing, more or less.
As of last week’s report “EUC 2008″, which is the program in question, had 2.156 million “beneficiaries.” To put this in context “regular” state unemployment had 2.956 million people receiving benefits as of November 3rd.
“Regular” unemployment (26 weeks) is an insurance program. You, the employee, pay into it with a piece of every paycheck. It is prohibited by law for your employer to itemize this as a deduction from your paycheck, but it is a fact that it comes out of your offered wage in each and every case. In this regard it is a forced insurance program (gee, where do you think the Government got the idea that forcing people to buy insurance — like health insurance — was a good idea?) but the fact remains that “regular” 26-week unemployment compensation is something you paid into, although as an employee it is an insurance program you cannot opt out of.
EUC is a welfare program. It is entirely unfunded and you paid nothing for it. It was and is the clear intent of government to blur the line between the two, making you believe you were and are entitled to the latter benefit because “it’s something you earned” when in point of fact nothing of the sort ever occurred.
The problem is that not only does this form of welfare distort the job market, as it encourages people to “hold out” for a job they want rather than taking whatever they can get (or starting their own business, even if it is nothing more than doing odd jobs for money from people.)
It also distorts the picture that people have regarding work .vs. welfare, a hand out .vs. a hand up.
It is my considered opinion that unemployment insurance is something that you should have the right to either buy or not as an individual employee and your employer should have nothing to do with it. The current system is rife with fraud; in Illinois, for example, it is virtually impossible to prevent someone from getting unemployment even if they are fired for cause. I had multiple cases when I ran MCSNet where I terminated someone for a blatantly “for-cause” reason (e.g. not showing up for work on a repeated and notorious basis) and they would file for unemployment anyway. We would protest and lose and the person who got canned would collect despite being outrageously ineligible.
This sort of abuse hurt everyone who legitimately wanted to work at the shop, since their wage offer was originally reduced by the amount that I would have to fork over for unemployment “insurance.” The fact that any random employee could (and some did) claim this benefit illegitimately and got away with it meant that everyone in the place got screwed. Oh sure, the amount of the screwing for each employee was relatively small, but that’s not the point — if you steal a dollar or $10,000 from someone the only thing we’re arguing about is the amount of damage, not whether the act was proper.
As a nation we need to fix these problems. The best way to solve it in this case is to scrap the “unemployment” system entirely, and make unemployment a insurance program that employees can buy on their own initiative. That in turn would make such a benefit entirely portable and entirely at the employee’s discretion; in some cases people would choose not to buy it at all (e.g. a teen taking a summer job or a second income in a household that is not necessary but enhances lifestyle) where others would want to buy it (e.g. a head-of-household.) This would also allow private companies to price the insurance for the risk on an individual basis and they’d have a strong incentive to police fraud and claims for “benefits” where the person in question was fired for cause.
Let the hate mail aimed at me for the termerity to suggest that people should work for what they get, and that the scam level in our system be reduced, no matter how slightly, begin.
In the week ending September 8, the advance figure for seasonally adjusted initial claims was 382,000, an increase of 15,000 from the previous week’s revised figure of 367,000. The 4-week moving average was 375,000, an increase of 3,250 from the previous week’s revised average of 371,750.
Let’s look at the big table.
So we’ve got regular claims down but also EUC claims and now initial claims are spiking again. This appears that any “improvement” was a mirage, while the march of those rolling off extended benefits continue.
And that, my friends, is the bottom line.
Discussion below (registration required to post)
PPI: Some Like It HOT!
The Producer Price Index for finished goods rose 1.7 percent in August, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This increase followed advances of 0.3 percent in July and 0.1 percent in June, and marks the largest monthly rise since a 1.9-percent increase in June 2009. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 1.1 percent in August, and the crude goods index rose 5.8 percent. On an unadjusted basis, prices for finished goods climbed 2.0 percent for the 12 months ended August 2012, the largest advance since a 2.8-percent increase for the 12 months ended March 2012. (See table A.)
But the big table — where’s it coming from? Food and Energy.
The bad news however doesn’t end there — it also extends to crude goods where the escalation went all the way down the scale and did not stop with food and energy.
Coming into the announcement on “expected” QE this could be rather interesting…… this much is certain — a nearly 10% rise in energy costs at the crude level, and at 6.4% at the finished level, isn’t the sort of thing you want to see if there is more credit cheapening coming from The Fed.
I am amused by the Shadow Weekly Leading Index Project which claims the probability of recession is 31%. I think it is much higher.
When the NBER, the official arbiter of recessions finally backdates the recession, May or June of 2012 appear to be likely months. Let’s take a look at why.
US Manufacturing PMI
Markit reports PMI signals weakest manufacturing expansion in 11 months
- PMI lowest since July 2011, suggesting slower rate of manufacturing expansion
- Rate of output growth broadly unchanged
- New orders rise at weakest pace in four months
- Input costs fall for first time in three years
Durable Goods Orders Plunge
Those numbers do not look good but they are hardly disastrous. Here are some numbers that are disastrous.
Philly Fed Survey
For the second consecutive the Philly Fed Survey has been solidly in the red.
Those numbers are nothing short of a disaster.
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, fell from a reading of ‐5.8 in May to ‐16.6, its second consecutive negative reading. Nearly 40 percent of the firms reported declines in activity this month, exceeding the 22 percent that reported increases in activity.
Indexes for new orders and shipments also showed notable declines, falling 18 and 20 points, respectively. Indexes for current unfilled orders and delivery times both registered negative readings again this month, suggesting lower levels of unfilled orders and faster deliveries.
Firms’ responses suggest steady employment this month but shorter hours. The percentage of firms reporting higher employment (14 percent) edged out the percentage reporting lower employment (12 percent). The current employment index increased 3 points this month. Firms indicated fewer hours worked this month: the average workweek index decreased 14 points and posted its third consecutive negative reading.
Note the misguided optimism about six months from now. It’s not going to happen.
- Europe is a disaster.
- US manufacturing is cooling rapidly
- China is cooling rapidly: China Manufacturing PMI 7-Month Low, Sharpest Decline in New Export Orders Since March 2009
- US Monetary policy is at best useless, but more likely net harmful, especially to those on fixed income.
- First year presidential politics are frequently recessionary
- US still needs fiscal tightening
- Unemployment insurance has expired for millions: 200,000 Lose Unemployment Benefits This Week, Nearly Half From California
- Self-Employment desperation: 100% of U.S. Jobs Added Since 2010 Have Been Self-Employment, Contractor, or Other Jobs Without Unemployment Insurance Benefits
- Last two jobs reports have been dismal: Another Payroll Disaster: Jobs +69,000, Employment Rate +.1 to 8.2%, April Jobs Revised Lower to +77,000; Long-term Unemployment +310,000
- The 4-week moving average of weekly unemployment claims is at the highest rate of the year, at 386,250.
- New home sales cannot gain significant traction: New Home Sales Hype vs. Reality
- Tax Armageddon
Deficit spending has carried this “recovery” further than I thought it would, but the party is now over.
It will be difficult if not impossible to overcome the above set of circumstances regardless of what anyone feels about economic back-tested recession probabilities.
Please consider Taxmageddon
The Tax Foundation reports that because of higher federal income and corporate tax collections, Tax Freedom Day came four days later this year than last. And the bad news is that unless Washington takes action, it will take working Americans 11 more days to meet next year’s tax burden.
That’s all due to Taxmageddon — a slew of expiring tax cuts and new tax increases that will hit Americans on January 1, 2013, amounting to a $494 billion tax hike. Heritage’s Curtis Dubay reports that American households can expect to face an average tax increase of $3,800 and that 70 percent of Taxmageddon’s impact will fall directly on low-income and middle-income families, leaving them with $346 billion less to spend.
Taxes Will Go Through the Roof
Without significant tax code changes, in 2013, America is scheduled to get hit with what would be the largest tax increase in our history.
Not only will the $1,000 per year tax holiday for a $50,000 income household disappear, come 2013 all Americans will see the tax on their first $8,700 of income jump from a 10% rate to 15% rate.
That hike will cost the majority of filers an additional $435.
For those eligible for child care tax credits that deduction will drop from $1,000 to $500. The marriage penalty will roar back into effect. The AMT, alternative minimum tax, will finally kick in.
Roll those changes up and a family filing as married with two children making $50,000, will see their taxes increase by basically $2,700.
Regardless of whether or not you feel taxes need to be raised, a big set of tax hikes is scheduled to happen.
To be sure, some of those hikes will be undone in compromises, but many if not most will sneak through.
Who is to blame for Taxmageddon?
Republican are to blame. They accepted this silly deal instead of a far better one that Obama would actually have signed.
But No! Republicans insisted on no tax hikes at all in 2012, putting everything off until after the election, believing Romney would win in a cake-walk.
However, if President Obama wins, certainly not at all an unlikely possibility, he is going to drive a much harder bargain this go around.
Regardless of tax consequences, the US is headed for recession, if not already in one. 2013 rates to be a disaster regardless who wins.
Mike “Mish” Shedlock
In the week ending June 16, the advance figure for seasonally adjusted initial claimswas 387,000, a decrease of 2,000 from the previous week’s revised figure of 389,000. The 4-week moving average was 386,250, an increase of 3,500 from the previous week’s revised average of 382,750.
Well, no, it’s not. And that’s a problem.
Ominously, the “big table” was almost flat — roll-offs in the extended benefits are countered by new claims in the 26 week “basic” program, which may indicate building layoff pressures once again.
This is not confirmed, but it’s definitely not a good sign, and this far into the so-called “recovery” we should be well on our way to solid, week-over-week gains in these statistics.
It’s not happening.
There is no recovery folks, and there can’t be — there is simply too much debt and thus far everyone’s “prescription” for how to “fix it” is to…. wait for it… add more!