Thursday, December 15, 2011

Weekly Jobless Claims Fall to 3.5 Year Low

The Department of Labor reported today that seasonally-adjusted jobless claims fell to 366,000 for the week ending December 10, which is the lowest level since May 2008, three and-a-half years ago.  That was far below the increase to 390,000 claims that was expected by the market consensus, and another indication that the sub-par labor market is gradually improving.  The four-week moving average for weekly claims fell to 387,750, the lowest level since July 2008 (see chart above).

20 Comments:

At 12/15/2011 9:17 AM, Blogger juandos said...

JOBLESS RATES DROP TO LOWEST IN OVER 3 YEARS, LONG TERM UNEMPLOYMENT STILL RISING.

 
At 12/15/2011 9:24 AM, Blogger VangelV said...

What is being ignored is the low and falling participation rate. Having individuals give up looking for jobs is not exactly a good thing.

 
At 12/15/2011 9:26 AM, Blogger Michael Hoff said...

Just an observation here, but it seems to me they make great hoopla about these initial numbers, then very quietly, and quite frequently, revise them upward later. I'll wait to see the revised numbers.

 
At 12/15/2011 11:43 AM, Blogger FloridaSteve said...

Blechh.. I find the labor participation rate and to a lesser degree the consumer confidence figures to be much more "authentic" indicators. They're not sexy but they're much more honest. And they are quite frankly awful and getting worse.

 
At 12/15/2011 11:46 AM, Blogger bart said...

An inconvenient stat for the perma bull:

"Total claiming benefits" jumped a full million up to 7.449 million from 6.574 million from last week - and an average of 6.77 million the last 10 weeks.

 
At 12/15/2011 11:49 AM, Blogger bart said...

Also, my reconstructed U7b unemployment rate (public before John Williams one) which includes all 'discouraged workers' that are analogous to the participation rate is still in the 23% range.

Another "inconvenient" fact.

http://www.nowandfutures.com

 
At 12/15/2011 12:58 PM, Blogger Don said...

Question: How accurate are the "seasonal" adjustments? I ask because the last 2-3 years, the hiring up-take has appeared to be a bit low this time of year, and this year it's a bit higher than I can recall it being in quite some time.

If I'm right (certainly arguable, as this is completely anecdotal) and the hiring numbers are significantly higher this season than the last few seasons, I would think that would have a serious effect on the these numbers.

Of course, if I'm right, then there will be larger than expected losses in January/February numbers.

 
At 12/15/2011 1:57 PM, Blogger David Templeton, CFA said...

The chart in this post shows number of people not in the labor force.

http://disciplinedinvesting.blogspot.com/2011/12/fragile-employment-market.html

 
At 12/15/2011 1:58 PM, Blogger sethstorm said...

I find the labor participation rate and to a lesser degree the consumer confidence figures to be much more "authentic" indicators.

Agreed. Lower layoffs + lower hiring makes the picture a lot worse than what the U3 numbers portray.

 
At 12/15/2011 2:07 PM, Blogger Jet Beagle said...

Congress doesn't have to do anything if they want to reduce the unemployment rate:

Federal support for extended unemployment benefits for more than 2 million Americans will expire on Dec. 31 if Congress does not act.

 
At 12/15/2011 2:09 PM, Blogger Jet Beagle said...

VangeIV: "Having individuals give up looking for jobs is not exactly a good thing."

If "give up looking" means they don't get to collect unemployment benefits, it's a good thing for those of us who pay taxes.

 
At 12/15/2011 2:14 PM, Blogger VangelV said...

If "give up looking" means they don't get to collect unemployment benefits, it's a good thing for those of us who pay taxes.

Usually when they give up the taxpayer winds up paying again. That is the way that social democracies work.

 
At 12/15/2011 2:20 PM, Blogger Jet Beagle said...

"Usually when they give up the taxpayer winds up paying again."

How? Food stamps?

 
At 12/15/2011 3:38 PM, Blogger VangelV said...

"Usually when they give up the taxpayer winds up paying again."

How? Food stamps?


That is one way. Then there are housing subsidies, free health care, etc. As long as government is using its taxation power to fund transfer schemes the taxpayer will be on the hook as many find it easier (over the short term) to stay on welfare programs rather than work.

 
At 12/15/2011 4:37 PM, Blogger Jet Beagle said...

"many find it easier (over the short term) to stay on welfare programs rather than work."

I'm sure the laws vary from state to state. But I thought in most states that able-bodied persons were required to seek work in order to receive welfare and subsidized housing. That doesn't mean they have to search diligently. But even going through the motions should propel them into the category of "Actively seeking work".

If I am correct about the welfare laws, then I think the majority of those not seeking work are living in households which have at least one wage-earner or source of income. A 60 year old woman married to a social security recipient can easily be "Not seeking work" without requiring welfare. So can any unemployed person married to someone who is working.

 
At 12/15/2011 8:11 PM, Blogger VangelV said...

If I am correct about the welfare laws, then I think the majority of those not seeking work are living in households which have at least one wage-earner or source of income. A 60 year old woman married to a social security recipient can easily be "Not seeking work" without requiring welfare. So can any unemployed person married to someone who is working.

I believe that an army of paid social workers and activists have made it very easy for people to get support without doing much in the way of seeking work. One way is the medical route. An individual can claim that they are incapable of working and ask for disability payments. Many who are close to retirement can use these payments as a bridge until they are eligible for SS. Fraud is rampant and hundreds of millions are lost each quarter to people who know how to game the system.

 
At 12/15/2011 10:39 PM, Blogger R. Oliver said...

Your graph and data would be more effective if you made it "initial claims" on both the graph title and in the body.

 
At 12/16/2011 2:26 PM, Blogger sethstorm said...


As long as government is using its taxation power to fund transfer schemes the taxpayer will be on the hook as many find it easier (over the short term) to stay on welfare programs rather than work.

Then business should be more competitive in compensation regarding those programs. They're asking people to be more competitive for business, what is wrong with a quid pro quo by making it work in both directions(as opposed to just favoring business)?

 
At 12/16/2011 3:26 PM, Blogger VangelV said...

Then business should be more competitive in compensation regarding those programs. They're asking people to be more competitive for business, what is wrong with a quid pro quo by making it work in both directions(as opposed to just favoring business)?

I think that you are confused. Businesses cannot use force to get people to work for them. They compete for labour in a marketplace in which consumers ultimately decide the 'fair' price as they reward those businesses who are capable of meeting their needs at a cost that is acceptable and punish those that are either not good enough or not cheap enough.

On the other hand, government can and does use force to get the funding it needs for its transfer programs. There is nothing productive about anything that government does.

 
At 12/18/2011 9:37 AM, Blogger juandos said...

Well I don't know just how valid the jobless claims are when the so called big picture is looked at...

From the Heritage Foundation there is the following: The 2010 Index of Dependence on Government

Abstract: The number of Americans who pay taxes continues to shrink—and the United States is close to the point at which half of the population will not pay taxes for government benefits they receive. In 2009, 64.3 million Americans depended on the government (read: their fellow citizens) for their daily housing, food, and health care...

 

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