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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Borat's picture

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

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.

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...

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.

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:)

Whizbang's picture

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

papaswamp's picture

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

ZeroPower's picture

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

Cursive's picture

Greek Shoots!  (hat tip to john_connor)

Neo-zero's picture

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

Ras Bongo's picture

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

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.

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.

bugs_'s picture

Uber bludgeoning blow capitulation and towel throwing.

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.

BlackBeard's picture

Cialis > Viagra > blue pills

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. 


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.

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.

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)
cossack55's picture

Love the way Texans cut thru the BS.

Wynn's picture

Looks like Barney just spotted a bent over taxpayer.


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.

papaswamp's picture

...thanks for the laugh!..

Running on Empty's picture

Na Dodd just finished blowing em.

Clayton Bigsby's picture

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

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.
sumo's picture

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

Flakmeister's picture

  My dyslexia causes me to refer to this as the

"The Double Rip Depression"


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?

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

Bankster T Cubed's picture

like a hell gull

carrying the clam of humanity

higher and higher

above the parking lot

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...

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.

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.

Takingbets's picture

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

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.

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.

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

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.
Joe Shmoe's picture

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

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.

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. 

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.