Initial Jobless Claims At 414K, 10th Consecutive Week Above 400K; Housing Starts At 560K, Both Modestly Better Than Expected

Tyler Durden's picture

While this morning litany of economic news was modestly better than expected, it really did nothing to change the picture that the US is rapidly regressing into another recession. Initial claims came at 414K, better than expectations of 420K, but as always expect next week's number to be revised higher to 418K or so: last week's number was as always pushed up from 427K to 430K. Far more importantly, this is the 10th consecutive week in which the initial claims data prints over 400k. Bullish? Continuing claims was just worse than the consensus of 3,670K, at 3,675K, down from an upward (of course) revised 3,696K from 3,676K. The biggest change was attributed to New York state, where 4,060 fewer layoffs were seen in the construction, mfg and retail industries, followed by California with 2,510 fewer claims due to a "Shorter work week, as well as fewer layoffs in the service industry." So shorter work weeks are now economic positive. Lastly, on the claims front, the 99 week cliff is pushing ever more people from under the government subsidy wing as 115K people dropped from ongoing EUC and Extended Benefits. The EUC 2008 number is 3,293,507 compared to 4,798,009 a year ago: nearly 1.5 million people have now lost the weekly government check to sit around and look for jobs. Looking at housing starts, the seasonally adjusted annualized number for May was 560,000, just above the 541,000 from April, although below the 580,000 from May 2010. Consensus expected 545K new home starts for the month, or a 4.2% increase from the unrevised April number of 523K. In other words, the starts data was both a miss and a beat, depending on what the baseline used is: revised or unrevised. On an unadjusted basis, there were 55.6K units in May started on, with multi-family units jumping to 13.1K, the highest since September 2010's 13.2k. Lastly, the Q1 current account balance, a largely delayed and irrelevant number, came at -119.3 billion, on expectations of -130 billion.

Bottom line: horrible data that came just better than expected. Which is why the market is largely ignoring it and once again focusing on the only thing that matters: the EURUSD.

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FOC 1183's picture

AZ decision likely to artificially push number below 400k next week

Version 7's picture

Let's not be tough on the mainstream media. Each time they talk a few zero-hedgers are


EscapeKey's picture

Bernanke declares recession over? Oh, right, just as he declared housing was not in a bubble, and anyway the issue in subprime was contained, and anyway the US would definitely avoid a recession?

Fuck, if there's an indicator that the recession is getting worse, it's Bernanke spewing lies again.

ziggy59's picture

on Bizzaro World, if your not collecting UE benefits you're working.

o, look for The Oh, to claim we added 1.5 million jobs...and drugs are illegal?

Bob's picture

What's a real economy got to do with the real world, anyway?

I am more equal than others's picture

Future are negative.  Thought this news would lead to a positive day.

HelluvaEngineer's picture

Positive now.  Still think we need to get to test 1255 before a big ole bounce.

Cdad's picture

Now turning negative again.  Engineered nonsense.  ES + SPY + ______ = jobs!

Everyone together now, "Thank you, Ben Bernanke, for this wasteland."

SheepDog-One's picture

'Better-than-expected-ing' our way right into the greatest depression.

docj's picture

Yep, "Better than expected" roughly translates to "Slightly less God-awful than expected".

Either way, it's full of Doom.

Silver Dreamer's picture

Hey, with a ground war pending in Libya, all of the unemployed should sign up.  har har

SheepDog-One's picture

Yes being a pawn for Uncle Thug, going overseas to someplace no one hardly heard of before to kill all the natives, because apparently they really piss Uncle Thug off.

Silver Dreamer's picture

But... but... They're fighting for our freedom!  A guy said that to my wife once, and she cracked up laughing.  I don't think he was amused.  A lot of folks who are prior and current military "get it" now, but apparently quite a bit do not as well.  Supporting the corporate fascist empire by stomping on sovereign nation's with needed economic resources is NOT "fighting for our freedom."

SheepDog-One's picture

I talk to a lot of military guys on youtube, and the mood is decidedly sour. Troops morale at all time lows, suicides off the charts, when they come home on leave they beat and kill their families, its not good.

Alcoholic Native American's picture

They are nothing but mercs, the only thing they are fighting over there is unemployment.   When they get back over here, they soon realize the place is worse off than when they left it.



mayhem_korner's picture

Bottom line: horrible data that came just better than expected. Which is why the market is largely ignoring it and once again focusing on the only thing that matters: the EURUSD.

Dollar going to the moon on the back of failing Euro, YET Au holding solid.  Gold is the beacon of strength.

SheepDog-One's picture

The only thing that matters is 2 printed to oblivion worthless fiat currencies. 

writingsonthewall's picture

Look Maw - it's a recovery.......oh no wait a's another tornado...

Sudden Debt's picture



US préelections are coming up, and they'll need at least 5 million bumpersticker distributors for the new slogan!!!




knowless's picture

long bumper stickers, buttons, tshirts.

give us an obama-nation! <(I was certain that one would sell, too lazy to get around to it though)


topcallingtroll's picture




Van Halen's picture

It's called Al Jazeera.

Hour after hour of Arab-headcracking goodness!

Version 7's picture

According to John Williams' Shadow Stats, the number of un/sub-employed now stands

at about 22% among the US population. And nearly half of the jobs being created in

the private sector are McDonald's..

SheepDog-One's picture

I have a hard time believing the McDonalds numbers. Each one has what, 10 or so staff? So they'd have to be building hundreds of new McDonalds for the numbers to even begin to fit. I havent seen a new one here, have you?

docj's picture

The ones around me (suburban Boston) have ludicrously high turn-over - esp. among "management". So the McJobs number could be more churn than not. Don't know if that's the case everywhere in the McWorld, though.

I've actually seen 1 or 2 closed over the last 18-months, and not because they relocated or re-fabed the building - just flat-out closed. That would have been completely unthinkable prior to the start of The Great "Recession".

LRC Fan's picture

These markets are so rigged.  Truly horrid economic data is sometimes the excuse used to pump the ES by 10+ points, while better than expected data can also pump the ES.  The economic data really doesn't matter at all. 

Idiots who say the stock market is "forward looking" make me laugh. 

I don't recall the markets tanking until AFTER most of the bad data came in.  Right now, the market has plunged for 7 straight weeks, so there must be trouble on the horizon, right?  After all, the market is a forward looking one.  Fucking bullshit all around while they print, print, print, bailout, print, bailout, print, transfer money, print, bailout and print some more. 

SheepDog-One's picture

'The markets' are truly irrelevant at this point, nothing but a statist centrally planned and controlled joke. 

Widowmaker's picture

You forgot record bonuses in your last paragraph -- Gods work and all...

Rainman's picture

Better bad numbers means morsels for the starving bulls. Brian Sack will be at his desk early.

digalert's picture

"Better bad numbers"

Hey, isn't that a CNBC talking point?

sbenard's picture

This was reason to rally stock futures off fresh new lows?

Wall Street: "Must... perpetuate... Pollyanna Party... at any... cost!"

Wall Street is grasping at straws to perpetuate the delusion! It's bad, folks, and it's only going to get worse! Plan and prepare accordingly!

SheepDog-One's picture

I dont buy it at all, 560,000 new home starts? Where? And combining the last 3 months theyre saying almost 2 million new homes are under construction? I call bullshit. The real number is lucky to be 50,000 new homes in total.

ziggy59's picture

i believe the numbers are an annual based number..


50k is still only 1000 new home/state and i believe condos, appts and mobile homes fit the stats, but i may be wrong.

TruthInSunshine's picture

SD1, the new home permit data is an extrapolation of full year trends. Remember, this is data representing the # of new home permits that builders pulled on single family dwelling units (it doesn't mean they're sold; many of them are 'spec' builds).

Just for some context, they are now saying 500k+ new homes will be built this year, and this rate was forecasted to be closer to 380k back in February (over 2 million new permits were issued in 2006).

I think it will be less than 500k as things have begun to once again deteriorate within this space as more foreclosures are coming onto the market to compete with new homes, building materials are showing sustained inflationary trends due to Bernanke's policies and not organic demand, and many homebuilders are 'spec'ing' more new homes - building without a buyer in hand, as the alternative would be to literally either cut their employees yet again or close down.

sbenard's picture

Home STARTS do not equate to home SALES! They are NOT correlated! In a glutted market, it only leads to lower prices and a depressed market.

Rainman's picture

...yes, channel stuffing the sticks and bricks. I love Amerika !

docj's picture

Not seen so many places on the market in my area (again, suburban Boston) in the 11-years I've lived here. People who've been here longer say the same thing. Open Houses every weekend - absolutely nobody looking.

And yet, there are not less than 3 new developments going-up right now in my small suburb - all would have been 3/4-mil range houses in 05-06. Go figure.

Channel stuffing, indeed.

RKDS's picture

Home prices are still pretty high here.  I drive past billboards advertising townhouses starting in the low low $160Ks.  Great, except the "rich" state employees average $34K per year.  What's that rule of thumb, 2.5 times your salary?  Yeah about double what the average "rich" state employee can afford.  What do private sector paper pushers and bit flippers do?  Seems like if you don't buy an overpriced townhouse, the only other option is a matchbox palace quickly approaching $1 million.  Nothing has changed since I was moving out in 2008.  Nobody wants to build starter homes and the banks are content to sit on all the foreclosed properties until they literally rot no matter how many taxpayer-funded bailouts our elected/appointed prostitutes shovel down their greasy snouts.

Things that go bump's picture

Have you considered just grabbing one and squatting?

monopoly's picture

Flat day so far. It makes 0 sense that homebuilders are building new homes. They cannot compete with the banks and the amount of foreclosed homes held by the banksters keeps rising. Until this glut is moved, 2014?, they are just spinning their wheels. We have too many homebuilders, why do they not file for bankruptcy and just fade away into the sunset.

hedgeless_horseman's picture

why do they not file for bankruptcy

The homebuilder's inventory is an asset on the bank's balance sheet. 

SheepDog-One's picture

I call BS, flat out pile of crap. I know homebuilders, theyre sitting idle, laying off employees.

Bugman82's picture

Time for the bears to take their profits :)   You'd think most would learn that fighting the system is a little bit of a stretch.  It isn't a market based on fundamentals.  It is a market based on corporations making profits off those who think they trade based on data.

John Law Lives's picture

This is an excerpt from an AP article on the weekly unemployment claimdata:

<<<  Still, applications have been above 400,000 for 10 straight weeks, evidence that the job market is weak compared to earlier this year.

Applications had fallen in February to 375,000, a level that signals sustainable job growth.  >>>

Since when does 375,000 weekly unemplyoment claims signal sustainable job growth?  During the President George W. Bush era, the reported number that signaled sustainable job growth was much lower (i.e. 250,000).  It is obvious the media has moved the goalposts.  375,000 weekly unemployment claims is terrible.