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Major Miss In Initial Claims As Double Dip, Deflation Takes Even Firmer Hold

Tyler Durden's picture


Can we stop all discussion that we have avoided a double dip already? Initial claims came in at 472,000, up 12,000, compared to an expectation of 450,000. Last week was revised from 456,000 to 460,000. Dear Joe Biden - was the economic recovery in unemployment pushed back to 2011? Did companies receive the memo to fire, yet miss the other one, with the much more critical rhyming verb? Never fear - the BLS has an explanation for everything, and the surge in claims was presumably not only predictable, it was expected, and was blamed on the fact that there was a federal holiday in the prior week:yet somehow the consensus totally ignored this oh so obvious tidbit. Elsewhere the CPI was once again deflationary: CPI came in at -0.2%, and CPI ex-food and energy barely posted a heartbeat at 0.1%. Futures now retracing pretty much all EUR-driven gains. But not gold.

Some observations on the initial claims number from Market News:

Initial claims for U.S. state unemployment benefits rose 12,000 to 472,000 in the June 12 week and the previous
week was revised up after seasonal adjustment, not surprising in a post-holiday week, the U.S. Labor Department Thursday morning.

Meanwhile continuing claims in the June 5 week rose 88,000 to 4.571 million, after the previous week was revised up 21,000. The June 5 week’s continuing claims had initially been reported to have dropped to a low not seen since the second week of December 2008, but the latest figures restored continuing claims to trend, and except for the previous
week were the lowest only since late March.

A Labor analyst said only Oklahoma was estimated due to technical issues. States reported initial claims from manufacturing industries, construction and educational services, he said.

The reported 472,000 level was well above the Market News International survey median of 453,000 and yet, the Labor analyst said, should not have been that much of a surprise. Initial claims usually do surge in the week following a federal holiday and the seasonal factors expected an 8.4% rise of 33,000. Instead there was an 11.1% surge of 44,000 but still, the analyst said, in the range of what was to be expected.

The seasonal factors expect a decline in claims in the coming week, the analyst said, referring only to expectations embedded in past performance, not what might happen additionally because of economic factors.

The initial claims seasonally adjusted 4-week moving declined 500 to 463,500, the lowest only since the May 29 week.

The seasonally adjusted insured unemployment rate edged back up a tenth to 3.6% in the June 5 week. It was 4.9% a year earlier.

The unemployment rate among the insured labor force is well below that reported monthly by the Labor Department because claims are approved for the most part only for job losers, not the job leavers and labor force reentrants included in the monthly report. 

The Labor Department said that there were 191,103 fewer unadjusted Emergency Unemployment Compensation benefits claims in the May 29 week, lowering that category to 4,804,030. Extended benefits claims rose by 22,133 to 416,513 not seasonally adjusted.


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Thu, 06/17/2010 - 08:51 | 419088 Borat
Borat's picture

Well.. that is it... just gonna grab my popcorn, sit on my confortable couch and watch the double dip in 3D..

Thu, 06/17/2010 - 08:56 | 419110 Sudden Debt
Sudden Debt's picture

here are some good 3D movies to buy:

Thu, 06/17/2010 - 08:48 | 419089 papaswamp
papaswamp's picture

Since EUC2008 hasn't been renewed by congress that number is plummeting as people fall off the back-end of the support cart. SNAP participation numbers will probably accelerate. Just plain ugly. I expect the workforce numbers to shrink and NILF to increase substantially for June.

Thu, 06/17/2010 - 11:20 | 419423 BobWatNorCal
BobWatNorCal's picture

Good point.
Also, I wonder what this number will be revised upwards to, next report?

Between the use of "unexpectedly" and the constant, one-way, upward revision of numbers I am beginning to suspect something is going on...

Thu, 06/17/2010 - 08:47 | 419090 Cursive
Cursive's picture

Can we stop all discussion that we have avoided a double dip already? 

I don't know.  Maybe Leo will say that he needs sometime to analyze the numbers and before he comes back to "man up" and then he'll just starting posting bulltard crap again.  Seriously, Leo is apparently more bullish than Cramer.

Thu, 06/17/2010 - 08:53 | 419100 ZeroPower
ZeroPower's picture


Also, im just waiting for new highs on the ES. Whatever, give it till noon when all we see is green in the EU markets, add on top a Spanish bond auction which priced fine, and more green sharts are on their way:)

Thu, 06/17/2010 - 08:56 | 419109 Whizbang
Whizbang's picture

I hadn't seen the results of the spanish offering. It's interesting(?) to see that it went off well.

Thu, 06/17/2010 - 08:59 | 419117 papaswamp
papaswamp's picture

3 Bil EUR raised at 4.91%...I think.

Thu, 06/17/2010 - 09:14 | 419142 ZeroPower
ZeroPower's picture

4.88% ive read. Spread between 10yr bunds and Spanish dropped to 2.16%

Thu, 06/17/2010 - 08:59 | 419115 Cursive
Cursive's picture

Greek Shoots!  (hat tip to john_connor)

Thu, 06/17/2010 - 09:33 | 419181 Neo-zero
Neo-zero's picture

Hey it's Thursday what time is the riot in Greece.

Thu, 06/17/2010 - 09:10 | 419135 Ras Bongo
Ras Bongo's picture

I'd say the news so bad that we should climb at least 2% today.

Thu, 06/17/2010 - 09:06 | 419125 Cognitive Dissonance
Cognitive Dissonance's picture

For those who have been hoping, praying, who've been expending psychic energy to will the economy better, these numbers are deep psychological blows. Deep deep blows. For many, the only way to deal with a world that in their own minds has turned against them, despite their undying love and belief, is to continue to wave the pom poms. What comes later is either a breakdown into depression or an almost manic expression of optimism. Or as you said "bulltard" crap. This has little to do with reality, or at least the reality shared by the consensus, and more to do with their internally created reality.

Remember when the employment numbers were terrible if you backed out the Census and Leo declared he was going to study them and get back to us? We can't seriously think that Leo looked at that report with unbiased eyes. He was searching for information that confirmed his bias, his belief. And sure enough, when he posted an article the next day, it was focused mainly on the scraps that could be seen from a "positive" light.

And he even "agreed" that some of the numbers were bad, but they would change; his way of bargaining with the truth before rejecting it. See, I can admit everything isn't coming up roses. Now leave me alone to tend to my rose garden. The acceptance of alternative realities (meaning those that don't confirm our bias) has nothing to do with the "truth" or "evidence" or "proof" and everything to do with the internal barriers we erect to shield us from things we don't wish to face.

Thu, 06/17/2010 - 09:16 | 419156 ZeroPower
ZeroPower's picture

Your posts make a lot more sense after 1- researching the topic of C D and 2- reading your Insane Asylum article. Cheers.

Thu, 06/17/2010 - 10:26 | 419302 bugs_
bugs_'s picture

Uber bludgeoning blow capitulation and towel throwing.

Thu, 06/17/2010 - 09:14 | 419143 slovester
slovester's picture

Leo has discovered that very few people are interested in the blue pills he is dispensing when they are told that the pills aren't Viagra.

Thu, 06/17/2010 - 13:06 | 419639 BlackBeard
BlackBeard's picture

Cialis > Viagra > blue pills

Thu, 06/17/2010 - 08:51 | 419095 Joe Shmoe
Joe Shmoe's picture

The data keep reflecting the reality that normal people see in the world around them.  Will the market in turn do the same?  

Also, seems like there are two economies emerging: one based on people who have mortgages, consumer debt, unemployed spouses, falling wages, aging capital goods, crappy and expensive healthcare, dwindling savings, and on and on.

And another economy of corporate entities that, because of restructuring of debt and heavy layoffs, etc., appears healthy to shallow analysts and commentators who think healthy corporate balance sheets (for now) mean a healthy overall economy and a nascent bull market brewing.

Too bad these healthy corporations will have no one to sell to. 


Thu, 06/17/2010 - 09:29 | 419171 Cognitive Dissonance
Cognitive Dissonance's picture

What you're really asking is how long can they keep a corpse alive. The answer is remarkably long, especially when most people desperately wish for a Weekend at Bernie's.

Thu, 06/17/2010 - 09:43 | 419199 Joe Shmoe
Joe Shmoe's picture


Thu, 06/17/2010 - 08:52 | 419096 LoneStarHog
LoneStarHog's picture

DAMN IT! Read my lips -- There is NO Double Dip since we never honestly exited the Single Dip.  In fact, we went from a recession into a refusal-to-admit DEPRESSION!

Leave this Double Dip crap on the bullshit financial channels/media.

Thu, 06/17/2010 - 08:54 | 419102 Cursive
Cursive's picture


Thu, 06/17/2010 - 08:58 | 419112 Sudden Debt
Sudden Debt's picture

The stages Kubler-Ross identified are:

  • Denial (this isn't happening to me!)
  • Anger (why is this happening to me?)
  • Bargaining (I promise I'll be a better person if...)
  • Depression (I don't care anymore)
  • Acceptance (I'm ready for whatever comes)
Thu, 06/17/2010 - 08:59 | 419114 cossack55
cossack55's picture

Love the way Texans cut thru the BS.

Thu, 06/17/2010 - 09:27 | 419166 RedwoodTree
RedwoodTree's picture


Thu, 06/17/2010 - 08:53 | 419099 Wynn
Wynn's picture

Looks like Barney just spotted a bent over taxpayer.


Thu, 06/17/2010 - 09:01 | 419119 Fazzie
Fazzie's picture

That Bwaney Fwank is one sick SOB. Looks like Dobbs just walked up on him while he was exposing himself to a male page.

Thu, 06/17/2010 - 09:01 | 419120 papaswamp
papaswamp's picture

...thanks for the laugh!..

Thu, 06/17/2010 - 09:45 | 419205 Running on Empty
Running on Empty's picture

Na Dodd just finished blowing em.

Thu, 06/17/2010 - 10:34 | 419319 Clayton Bigsby
Clayton Bigsby's picture

wow, this is just rife with possibilities - think we need a ZH-sponsored caption contest

Thu, 06/17/2010 - 08:55 | 419107 King_of_simpletons
King_of_simpletons's picture


" U.S. first-time jobless claims unexpectedly rise, up 12,000 to 472,000 in latest week "
"Unexpectedly", like some dumb fuck was expecting blue skies and clear sailing.
Thu, 06/17/2010 - 10:36 | 419329 sumo
sumo's picture

Notice how the MSM reports bad housing numbers as "unexpected". LOL.

Thu, 06/17/2010 - 09:02 | 419121 Flakmeister
Flakmeister's picture

  My dyslexia causes me to refer to this as the

"The Double Rip Depression"


Thu, 06/17/2010 - 09:05 | 419124 Joe Shmoe
Joe Shmoe's picture

So, what is the bullish argument again?  Really, I mean it.  Why exactly are stocks rallying?  Can anyone answer this without some technical BS (oversold, 220dma breakthrough, etc.).  What's the actual fundamental logic for the equity bulls right now?

Thu, 06/17/2010 - 09:07 | 419128 KTV Escort
KTV Escort's picture

Ask yourself, "what would the devil do in this situation?" ~ answer: Raise it up high before slamming it to the ground in delight

Thu, 06/17/2010 - 09:11 | 419136 Bankster T Cubed
Bankster T Cubed's picture

like a hell gull

carrying the clam of humanity

higher and higher

above the parking lot

Thu, 06/17/2010 - 10:09 | 419266 aheady
aheady's picture


Thu, 06/17/2010 - 09:26 | 419165 HelluvaEngineer
HelluvaEngineer's picture

To me, it looks like everyone on Tim Geithner's speed dial list got another $100 billion dollars on Monday to buy up the market as they see fit...

Thu, 06/17/2010 - 10:41 | 419338 sumo
sumo's picture

"What's the actual fundamental logic for the equity bulls right now?"

Manufacturing - the inventory bounce from last year is still present. Oops, wait a sec ... ignore that recent data. And that. And that one.

Thu, 06/17/2010 - 09:05 | 419126 Edna R. Rider
Edna R. Rider's picture

Oh no.  Less people working = longer lines at the Apple stores.  This is one of my current bits of sage investment advice.  Along with more oil in storage = higher oil prices; more Treasury issuance = cheaper long-term rates (down to 3% says Shilling!); housing prices continuing their descent = higher XHB; Europe slowing down = stronger EUR.  I think you get the idea.  Or the lack of idea.  You see there is so much money out there it just GOES and GOES and GOES into anything and everything.

Thu, 06/17/2010 - 09:36 | 419185 Takingbets
Takingbets's picture

Edna, you forgot to use the word Printed in your description of the money being out there. :-)

Thu, 06/17/2010 - 09:56 | 419230 Cursive
Cursive's picture

@ Edna R. Rider


Thu, 06/17/2010 - 09:10 | 419127 papaswamp
papaswamp's picture

The Euro will shoot up against the USD as people realize the US is in far worse shape than Europe. (aka we're fucked).


Bonus...BDI crossed under the 3000 mark and weekly rail indicators are strating to turn red (food and forestry products) comes the big slowdown.

Thu, 06/17/2010 - 09:15 | 419146 jkruffin
jkruffin's picture

The collapse in the BDI signaled the last market crash, and yet many are not even paying attention to it at all.  If there no ships on the water, there are no products being delivered.  Doesn't take a rocket scientist to figure that out.

Thu, 06/17/2010 - 09:07 | 419129 Bankster T Cubed
Bankster T Cubed's picture

the numbers were perfect for the....[cough]..."markets"!!


hip hip hooray the "markets" will rally more!   what sucks is actually great!


all aboard the HMS MADOFF stock market rally provided to us courtesy of central bank commissars from hell

Thu, 06/17/2010 - 09:08 | 419131 jkruffin
jkruffin's picture

Remember this rule for hyperinflation:  She will be knocking on the door soon.


Governments will often try to disguise the true rate of inflation through a variety of techniques. These can include the following:

  • Outright lying in official statistics such as money supply, inflation or reserves.
  • Suppression of publication of money supply statistics, or inflation indices.
  • Price and wage controls.
  • Forced savings schemes, designed to suck up excess liquidity. These savings schemes may be described as pensions schemes, emergency funds, war funds, or something similar.
  • Adjusting the components of the Consumer price index, to remove those items whose prices are rising the fastest.
Thu, 06/17/2010 - 09:12 | 419139 Joe Shmoe
Joe Shmoe's picture

Interesting, jkr, and chilling.  Happening already, right?

Thu, 06/17/2010 - 09:22 | 419161 glenlloyd
glenlloyd's picture

Let's see...lost M3 reporting in '06 - check. Price / wage controls - not yet unless you count those on the govt dole. Does substitution of dog food as steak count as "adjusting" in the CPI?

If a statistic comes from the government I just don't have a lot of confidence in it. You have to ask yourself all those "W" questions about who, what, where, when and why, and generally by that time you've figured out that the statistics aren't true.

I have a small book from college that I'll refer to here, "How to lie with Statistics." I'm sure the BLS passes these out to all new hires.

Thu, 06/17/2010 - 09:14 | 419141 trillion_dollar...
trillion_dollar_deficit's picture

This is just the beginning. The state worker implosion is set to begin in July when many states begin FY11 budgets. 

Thu, 06/17/2010 - 09:44 | 419203 Assetman
Assetman's picture

Good point.

We are staring at the next round of crisis, folks.  It's only a matter of time.

All is on schedule, though... the Fed rides to the rescue with even more wasteful QE, sometime around September. 

You know, so those incumbents can be re-elected.

Thu, 06/17/2010 - 12:39 | 419594 ElvisDog
ElvisDog's picture

The problem with that plan is that we've reached a tipping point where additional QE will lose more votes than it buys. I.E. it's being increasingly perceived as an act of desperation, cowardice, and lack of leadership.

Thu, 06/17/2010 - 09:15 | 419149 chindit13
chindit13's picture

Tyler, you keep writing as if you think the market should have some sort of relation with the overall economy.  Apparently you have yet to accept the fact that the stock market IS the economy, at least the only economy that counts to anyone who is not a "little people".

It's near Quarter end, and everybody needs the print to be a good one.  Performance fees all around!  Nothing gets between a manager and his money, certainly not reality.

Oh, and from today's proposed tax changes might have fund managers in a higher tax bracket than their secretaries....

"two lobbyists representing Oaktree Capital Management...met with Congressional tax analysts and Senate aides to complain about a new tax buried in the Senate jobs bill.....Oaktree's appearance was arranged by aides to Sen. Evan Bayh (D-Ind.), who went to law school with Oaktree's co-founder and counts the company as a significant campaign donor"

Thu, 06/17/2010 - 21:15 | 420598 StychoKiller
StychoKiller's picture

But Evan Bayh is NOT running this year...

Thu, 06/17/2010 - 09:16 | 419155 docj
docj's picture

Private sector employers are "Going Galt" in a big way.  Anecdotal: my company (high-tech software) is very profitable and has been throughout The Great Recession (our profit margin never dipped below 32%).  We also have more work than our staff of roughly 1000 could ever hope to accomplish in our lifetimes.  We could easily hire 100 people - developers, customer support, AE's, you name it - and had about 70 open positions advertised prior to Oct '08 when the parent company froze our staff and salaries in place.

The Good news?  We're hiring again.

The Bad news?  We could easily hire 150-200 people and still not get the work done.

The Ugly news?  We're only advertising for about 20-30 people.

We work with every industry in every corner of the globe and we're hearing the same exact story.  Most can't even think about hiring because their revenue/margin numbers don't support it.  And those who's number do support hiring are looking to add about 20% or less of what they need - because they can afford to be picky and because nobody seems to believe this "recovery" is real.

Thu, 06/17/2010 - 09:27 | 419167 HarryWanger
HarryWanger's picture

Tough decision these days - stand in the unemployment line or the iPhone line. Decisions, decisions....

Thu, 06/17/2010 - 09:32 | 419180 trillion_dollar...
trillion_dollar_deficit's picture

CNBC Headline:

GM: Most Plants Will Forgo Usual Summer Shut-Downs To Keep Up With Demand (story developing)

Thu, 06/17/2010 - 09:50 | 419216 WineSorbet
WineSorbet's picture

Excellent.  More unemployed people buying cars on credit from a car company that should have been out of business years ago.  I like where this is going.

Thu, 06/17/2010 - 10:22 | 419297 Me XMan
Me XMan's picture

All unemployed people will get new car!

Thu, 06/17/2010 - 17:55 | 420317 Mark Beck
Mark Beck's picture

It is based on inventory requirements after the fleet buys, is has no bearing on the realitive health of the economy. GM needs 12 Million SAAR to break even. From a cash flow basis, without seeing their books, my guess is they are slightly below break even. GM will probably need to right size again after an IPO.

I do not see how GM can IPO without a huge taxpayer haircut. How can a taxpayer loss translate into more car sales for GM?  

The big news is Chrysler. Many doubt they will be in a position to pay the VEBA payment due in July without loans. Will Fiat step up the plate?

Mark Beck

Thu, 06/17/2010 - 09:50 | 419215 Running on Empty
Running on Empty's picture

In the end all we'll have is Metaphors to describe what happened during these times.



Thu, 06/17/2010 - 09:54 | 419225 Panafrican Funk...
Panafrican Funktron Robot's picture

I'm looking at early October as being the crash date.  I think they have enough juice to last until then, and that should create sufficient incentives to herald in the new set of relatively powerless freshman reps.  Nothing like anti-incumbancy to make people feel like they actually control something with their votes. 

Thu, 06/17/2010 - 12:16 | 419547 Mark Beck
Mark Beck's picture

I really hate the fidelity of these weekly reports. Its hard to get a proper overall picture of the true trends in employment to the point of evaluating cause and effect of policy or programs.

I have read this report every week for the past two years. Over the past year, these moves of around 10,000 up or down are probably in the noise for making any meaningful predictions. What we do not see is a huge move down, representing massive non-government re-employment. But, most ZH followers would know that there is no such event in the pipeline to produce such an effect at the state level.


Perhaps more meaningful is in watching EUC 2008 numbers. My data shows that over the past two months about 150,000 per week on average fall off EUC. Meaning they did not find a job, their benefits expired. Which I tend to call systemic unemployment.

I heard on the radio today that perhaps this will be a jobless recovery. Well, there is no such thing as a jobless recovery. The only recovery we have experienced is government liquidity. Which is now draining out in several key areas.

What is incredible is the tone of the media per economic trends. Specifically, massive surprise at a reduction in business when the only buyer (Gov) leaves town. But, really, for the huge amounts injected, what was going to match it from the private sector?

Believe it or not, this was the plan.

Conclusion; we have a whole lot of stupid in Washington.


What is very interesting is that even the ARRA job creation machine cannot contend with de-leveraging debt. We see the same effect in net tax revenues. Something is very wrong with the economy, and the Administration and the FED do not know how to fix it.

Mark Beck

Thu, 06/17/2010 - 21:18 | 420604 StychoKiller
StychoKiller's picture

When Congress spends time doing stupid things it shouldn't be doing,
it is not doing even stupider things it shouldn't be doing.


Thu, 06/17/2010 - 16:18 | 420100 tony bonn
tony bonn's picture

i wouldn't listen to biden give me toupe advice let alone any explanation of the fake economic recovery.....what a fucktard...

Thu, 06/17/2010 - 18:15 | 420358 MoneyMcbags
MoneyMcbags's picture

Money Mcbags once again rants about new claims for unemployment and the proclivity of the (No) Labor Department to keep revising them upwards.

Thu, 06/17/2010 - 20:56 | 420580 bmwmc
bmwmc's picture

Stock rallied 200+ last thursday on a fall of 3000 now revised up by 4000.  Do we give that gain back?

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