Friday, May 21, 2010

Catching Up From From Yesterday: Philly Fed Index Positive for 9th Month and Jobless Claims Flat

"According to the firms polled for this month’s Philadelphia Federal Reserve Business Outlook Survey, regional manufacturing activity continues to expand. Firms reported some expansion of overall employment again this month. The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased slightly from 20.2 in April to 21.4 in May. The index has now edged higher for four consecutive months and has remained positive for the ninth consecutive month (see chart above)."

MP: More evidence of a V-shaped economic recovery in the Philadelphia Fed region for manufacturing output. 

From the Department of Labor report yesterday: In the week ending May 15, the advance figure for seasonally adjusted initial claims was 471,000, an increase of 25,000 from the previous week's revised figure of 446,000. The 4-week moving average was 453,500, an increase of 3,000 from the previous week's unrevised average of 450,500 (see chart below).

Comment yesterday from Scott Grannis about jobless claims: "No sign of a recession here." (Thanks to Morganovich for the suggestion to update jobless claims.)


16 Comments:

At 5/21/2010 8:50 AM, Anonymous Cooper said...

MP, Several months ago there was a post charting the shape of joblosses for each resession since 1900 and compairing their shapes with the amount of government stimulous. I was wondering if an update of that would be posible now that we have several more datapoints on the current resession.

 
At 5/21/2010 9:12 AM, Anonymous Anonymous said...

A private research group’s gauge of future U.S.economic activity unexpectedly slipped in April, the first decline in more than a year and a sign that growth could slow this summer, weighing on hiring.

The Conference Board said Thursday its index of leading economic indicators edged down 0.1 percent last month, the first drop since March 2009. Economists polled by Thomson Reuters had expected a gain of 0.2 percent ...

Factories have ramped up production in the past 12 months as customers restock shelves. Many companies cut their orders for goods during the recession and instead used up their existing stockpiles. Once inventories are restored to normal historical levels, growth in the manufacturing sector will depend on increases in consumer demand.

Leading indicators slip 0.1 percent in April, AP

 
At 5/21/2010 9:13 AM, Anonymous morganovich said...

The Philadelphia report's jobs component fell to 3.2 from April's 7.3, a troubling development since employment has been the weak spot of the current economic recovery.


WASHINGTON (MarketWatch) -- The number of people applying for unemployment benefits shot up 25,000 in the latest week, indicating continued weakness in the U.S. job market, government data showed.

Initial jobless claims rose to 471,000 in the week ended May 15, the highest level in a month, the Labor Department reported Thursday.

Economists surveyed by MarketWatch predicted initial claims would drop on the week, falling to a seasonally adjusted 440,000 from last week's revised reading of 446,000.

The four-week average of initial claims -- a better gauge of employment trends than the volatile weekly number -- also rose, up by 3,000 to 453,500.

"This is horrible," chief U.S. economist Ian Shepherdson of High Frequency Economics said in an email, suggesting the possibility of further increases.

While initial claims have fallen 25% from 12 months ago, they are now 3.6% higher compared with the end of 2009 in a reflection of the scarcity of new jobs. Most economists say claims need to fall below 400,000 to signify accelerating job creation.

employment is a lagging indicator, but this is turning into a pretty long period of jobless recovery.

 
At 5/21/2010 9:28 AM, Blogger juandos said...

"employment is a lagging indicator, but this is turning into a pretty long period of jobless recovery"...

Not to worry though morganovich since our extorted tax dollars will be used to keep unemployment figures high...

From AP: Lawmakers responded Thursday to the persistently high jobless rate by announcing a deal to extend expanded unemployment benefits for the long-term unemployed through the end of the year. Laid off workers would also continue to get subsidies to buy health insurance through the COBRA program. House leaders plan to vote on the bill Friday, with the Senate voting next week...

 
At 5/21/2010 9:39 AM, Anonymous morganovich said...

i don't understand what scott feels that chart to demonstrate.

claims seem to be at levels similar to the peaks of the 2 prior recessions. sure, there's been some population growth since 2001, but not enough to make this number look good. (cut 471 by 7% pop growth and you still get a number that looks like the peak of 2001) further, the ugly claims square well with ugly unemployment numbers.

U6 over 70% above it's historical average (17% vs an avg of under 10%) certainly doesn't look too encouraging to me. for u6 to be just a whisker off the highs (and rising) after 3.5 quarters of purported GDP growth shows you that something is wrong.

2009 Jan 14.0%
2009 Feb 15.0%
2009 Mar 15.6%
2009 Apr 15.8%
2009 May 16.4%
2009 Jun 16.5%
2009 Jul 16.4%
2009 Aug 16.8%
2009 Sep 17.0%
2009 Oct 17.4%
2009 Nov 17.2%
2009 Dec 17.3%
2010 Jan 16.5%
2010 Feb 16.8%
2010 Mar 16.9%
2010 Apr 17.1%

why is unemployment going up 10 months into a recovery? (it ought to be dropping after 6)

doesn't seem very v shaped or a broad based sign of economic activity.

this makes me suspicious that we have been seeing more of a dead cat bounce and a liquidity bubble than a recovery.

the harder YOY comps coming in H2 will reveal this.

 
At 5/21/2010 10:16 AM, Anonymous Cooper said...

Sorry I couldn't find the exact chart I was referancing earlyer. But I think it most closly mimics this chart from Calculated Risk.

Page
http://www.calculatedriskblog.com/2010/05/april-employment-report-290k-jobs-added.html

Chart
http://calculatedriskimages.blogspot.com/2010/05/employment-and-recessions-april-2010.html

 
At 5/21/2010 10:23 AM, Anonymous Cooper said...

Sorry to double post but this was the shape of the graph. and it was an article about how government stimulus elongated the trailing edge.. I'll keep looking

 
At 5/21/2010 10:35 AM, Anonymous Cooper said...

Found it
http://wallstreetpit.com/wp-content/uploads/2009/05/image06.jpg

 
At 5/21/2010 11:13 AM, Anonymous morganovich said...

here's a worrying trend:

DENVER - The state's Unemployment Trust Fund has run out of money forcing the Colorado Department of Labor to borrow more than $250 million in federal funds to keep paying thousands of people who are out of work.

Because of the swell of unemployment claims during the recession, the Colorado Department of Labor says its unemployment fund has reached insolvency.

As of May 11, the state has borrowed $254 million in federal funds to continue to pay benefits to people who are unemployed.

 
At 5/21/2010 1:21 PM, Blogger juandos said...

How long will the Philly Fed be positive after the following goes into effect?

From CNN Money: Stealth IRS changes mean millions of new tax forms

The massive expansion of requirements for businesses to file 1099 tax forms that was hidden in the 2,409-page health reform bill took many by surprise when it came to light last month. But it's just one piece of a years-long legislative stealth campaign to create ways for the federal government to track down unreported income.

The result: A blizzard of new tax forms that the Internal Revenue Service will begin rolling out next year
...

 
At 5/21/2010 2:36 PM, Blogger sethstorm said...


From AP: Lawmakers responded Thursday to the persistently high jobless rate by announcing a deal to extend expanded unemployment benefits for the long-term unemployed through the end of the year. Laid off workers would also continue to get subsidies to buy health insurance through the COBRA program. House leaders plan to vote on the bill Friday, with the Senate voting next week...

How about this? Since you're paying for them no matter what their doing...

Do everything to get them back into work in the US. Even if it means getting the long-term folks back into their previous profession. To get rid of that other bugbear, make them non-refusable at up to their previous pay rate.

You want these people at work, put your money where your mouth is located.


Leave your snark at home.

 
At 5/21/2010 2:52 PM, Anonymous morganovich said...

Seth-

"How about this? Since you're paying for them no matter what their doing...

Do everything to get them back into work in the US. Even if it means getting the long-term folks back into their previous profession. To get rid of that other bugbear, make them non-refusable at up to their previous pay rate. "

This is disjointed and insane even for you. Are you arguing that we should hire guys who we don't need or want to solve unemployment? There's a name for that kind of policy - fascism.

If only those poor buggy whip artisans could still be nobly plying their trade...

 
At 5/21/2010 4:15 PM, Anonymous grant said...

Put some smart unemployed into forced or elected training programs related to their profession through existing colleges or even the internet.
Recessions cause time to be lost, so make good use of that time by training to move up to higher skills and higher future earnings.
Don't whine and do nothing.BE a winner,Keep learning no matter what.

 
At 5/21/2010 4:48 PM, Blogger sethstorm said...


If only those poor buggy whip artisans could still be nobly plying their trade...

Well, the industries that are alive at this age are still around. No, they're not automating everything away - they're just moving it beyond the reach of the US.

It's more like the buggy whip manufacturer bought a few Congressmen and moved his production to the middle of nowhere. That's what it is like this time around.

Is it any worse than paying endless checks to people that end up getting more idle, courtesy of the market?


Put some smart unemployed into forced or elected training programs related to their profession through existing colleges or even the internet.
Recessions cause time to be lost, so make good use of that time by training to move up to higher skills and higher future earnings.

They still have to put food on the table, and hope that what they trained in isn't going offshore anytime in their career.

 
At 5/21/2010 8:55 PM, Blogger juandos said...

"Is it any worse than paying endless checks to people that end up getting more idle, courtesy of the market?"...

ROFLMAO! Good one sethstorm but the fact of the matter is that Congress is buying votes...

 
At 5/22/2010 6:09 PM, Blogger sethstorm said...

The fact of the matter is that Congress is buying votes...

You just gave me more of a case.

Would you rather have them working, or selling their votes? You seem to be fine to have these people not work.

 

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