As One Million Exhaust Jobless Benefits, A Look At What Recent Deteriorating Layoff Trends Means

Tyler Durden's picture

In addition to today's broad economic disappointment that once again nobody could have foreseen (save for a few comments from us back in January predicting just this most recent contraction), another incrementally negative development which will force the spin doctor to earn their overtime is the observation that over the past year at least 1 million unemployed have now officially fallen off the 99-week gravy train, and exhausted their entire jobless benefits. Luckily, for 10% of the US population there is the magically levitating S&P. For everyone else, there are foodstamps (for now).. and of course the worthless dollar. And in other news, Peter Tchir looks at the recent deplorable jobless claims numbers (wonder why you aren't hearing much about today's initial claims on CNBC? that's why) and comes to the following logical conclusion: "Currently expectations for next Friday's NFP is 183k.  I think the
number will be 160k, but in this world it makes no difference since that
will encourage belief in QE3 which will trigger dollar weakness which
will cause stocks to go up.  Since its hard to go long stocks with this
logic, it leaves me looking at precious metals." Tchir is not the only one doing so.

But first, the WSJ explains why quietly one million have fallen off Uncle Sam's weekly pittance:

Roughly one million people were unable to find work after exhausting their unemployment benefits over the past year, new data released Thursday by the Labor Department suggests.

The back-of-the-envelope datapoint is yet another sign that the labor market remains weak, economists said.

About 8.2 million idled workers were receiving unemployment benefits as of the week ended April 9, the Labor Department said in its weekly jobless claims report. That compares to about 10.5 million individuals at the same time last year, a decline of roughly 2.3 million people.

Since the federal government estimates that the economy created 1.3 million jobs during the 12 months ended in March, economists said that slightly less people probably fell through the cracks and couldn’t find employment.

“That leaves, roughly speaking, about one million people who have exhausted their unemployment benefits and have very likely not yet found a job,” said Joshua Shapiro, chief U.S. economist at MFR Inc. in New York.

However, as long as all these recently subsidy-free individuals have a mortgage which they are not paying, and which the banks are not enforcing payment on as that would accelerate mark to market in an insolvent world, we are not too worried about their prospects, for now.

We will be worried soon, when all the broken wheels supporting the zombi economy finally fall off (and god help us if Bernanke really does not do QE3).

From Peter Tchir:

Jobless claims were clearly a big miss.  Not only were they worse than expectations 429k vs 395k, but it was the worst week since January, and is confirming the rising trend in the 4 week moving average.  We will likely hear even less about the moving average next week, as a nice 385k print drops out of the average.

Over the past year, we have argued repeatedly that jobless claims have understated the problems in the labor market.  We maintain our view that structural changes to the labor market have helped keep the claims number down. The mere fact that fewer people are working has reduced the pool of people who can be laid off.

Employers are far less likely to layoff people who are working part-time or with minimal benefits.  It has been far easier to cut back on hours rather than lay people off.  The workers accepted this given the bleak job market, and the employers liked the free option of keeping these workers around in case their business rebounded.

Every disappointment in Non-Farm Payrolls has validated our theory.  The old models have consistently predcited or hoped for better reports than we got.  Although the numbers have been positive since October, we have not seen a big blow out number, and many have been downright weak - especially considering we got QE2 and the big tax 'compromise'.

So, coming into the Christmas holidays, with QE2 flooding the system with money, tax cuts for the rich being extended, and payroll tax cuts for the lowly employees, it made sense to retain workers.  Every employer had to hope that this was finally the long awaited turnaround.  Since the workers were cheap to keep on the payroll, the cost of preparing for this big turnaround was minimal.

Well, guess what happened?  That turnaround has stumbled.  At the very least its not strong, and at worst, its completely fizzled and runs the risk of fading completely when the government spending is finally reduced.  So employers, who held onto employees, for a long time are finally saying they just can't do it.

Maybe its in preparation of a slow summer season, a result of inventory build up, but its undeniable that many employers, who clung to the hope that business would pick up, are finally going through another round of reductions.

What about the vaunted small business job creation?  Isn't the birth/death model showing job growth here?  Sure, but its a model.  I think the layoffs are coming more and more from small business.  In small businesses, there really is a personal attachment.  The consequences of laying of an employee, who may even be a friend, are more heartfelt, than for a large corporation.  From talking to some small business owners, they were less likely to let someone go in this weak economic environment.  They actually felt a responsibility to their employee. They worked hard to reduce hours, encourage the person to look for another job, but did all they could to keep them employed.  They are now throwing in the towel.  None of the momentum from October has carried through.  They are seeing weakness again and are having to move into self preservation mode.

What about big companies?  Aren't they 'all' reporting record earnings?  Yes, earnings are great, but it seems like most have seen business slow a little, so Q2 guidance has been a little disappointing, and virtually all companies have expressed some concern about margins.  If you are concerned about  margins you aren't hiring.

So, we continue to believe that 429k report is worse than people want to make it sound (the old 450k rule of thumb is outdated), and this reversal is the positive trend is real and part of another wave of job weakness.  Currently expectations for next Friday's NFP is 183k.  I think the number will be 160k, but in this world it makes no difference since that will encourage belief in QE3 which will trigger dollar weakness which will cause stocks to go up.  Since its hard to go long stocks with this logic, it leaves me looking at precious metals.

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SilverIsKing's picture

Leaves me looking at precious metals too.

slaughterer's picture

Just heard a rumor that a few gigantic macro funds are laying on leveraged index shorts today. 

Cash_is_Trash's picture

Well there was a beat-down prior to Comex close.

SilverRhino's picture

Silver's price action looks like a fucking seismograph lately.  

Clueless Economist's picture

CNBS is actually quite useful to watch.  No, I am not talking about Steve Liesman's genius, but the commercials.

--I may be in my pajamas...

--Get Magic Jet or Jack or whatever now

--Bill Schaeffer made a financial gain with his invention, but these results are not typical

--Attention parents and grandparents with Gerber life insurance plan for your newborn

Highly polished and professional commercials keeps me glued to CNBS

Don Birnam's picture


...And on weekends, we are introduced to the remarkable Shake Weight For Men, followed by the umpteenth re-run of that crack piece of pop culture telejournalism: "Big Mac: Inside the McDonald's Empire."

redpill's picture

My favorite is the Magic Bullet infomercial with the comical "real people" guests, one of whom is dressed up like an older lady in a robe, with her hair in curlers, and an unlit cigarette dangling from her fingers.


Quinvarius's picture

Back in the banking crisis, before the days of free money, any bank that advertised on CNBC was about to have an near death experience.

knukles's picture

Fuck CNBS. 
I wanna start a cable TV channel called the Male Enhancement Channel.  Nothing but Spike and Fuel type programs, Manswers, almost nude female mud wrestling, full contact female sports, booze, beer, imported prescription drugs, firearms, bows and arrows, Myth-Busters blowing shit up, Gong Show reruns.... in fact, get Jerry Springer off of that lame Baggage program and let him do the New Gong Show, completely politically incorrect, bad arsed fucked up no good demented shallow entertainment...
With Male Enhancement Ads all over the place.  Appeal to the True Male Desparation, Viagra, Silent Bob, Penis pumps and assorted goodies, drawings for cases of Jack Daniels, bare nuckle fights....

Betcha the audience would be humongoloid.

Oh, and for redeeming value, have a ticker or two on the bottom showing PM's commodities, 4X and indexes... no individual stock quotes.  And online access to ZH.


RichardENixon's picture

Let me know when that hits the airwaves, I'm tuning in!

blunderdog's picture

Be sure to set something up with the Elimidate production company, whose vanity card used to say: AMUSE THE BRUTES

Blano's picture

Bring back The Man Show.

Popo's picture

Rising prices of commodities coupled with declining consumer spending power equals margin compression.

Margin compression equals a capacity overhang.

Does that still leave you looking at metals?

DosZap's picture

In light of the real reasons for holding to begin with, Hell yes it does.

Reduction in consumer spending can mean a lot of things.

And none of it affects the reasons owning PM's.

apartofthings's picture

Inflation: PMs rise in price. You are protected.

Deflation: PMs decline in price, but so does everything else. They keep their value.

Currency collapse: PMs worth something in the new currency, not sure about all the old paper investments. And if the new currency is gold/silver backed...

Economic collapse: Sure you can't eat PMs, but that wasn't the point. They carry your wealth through the collapse and out the other side.

For me it's a win-win-win-win scenario to own PMs. Physical only of course.

LFMayor's picture

green beer shits.  Break out the PBR.

repairs complete.

LFMayor's picture

Which one of you drinks that fucking popskull?  I swear, you'll shit through a screen door and never touch a wire if you drink that skankwater.

StychoKiller's picture

Meh, lagers -- gimme an Ale anyday.

hedgeless_horseman's picture

Can't the BLS also blame the nice weather? 

GALVESTON, Texas — The lights are back on around Southeast Texas after power outages linked to dry weather hit the region a day after several nearby refineries and chemical plants lost electricity.

Stuxnet gone off the reservation?

DosZap's picture

No, it's just one more piece of the Apocalyse working it's way through the world.

We just lost well over 600,000 acres due to fires, in the past 3 weeks.

And the funny part, if there is one, hasn't hit 90* but one time that I know of.No rain there, or in a lot of  Okla.

But the North Tx area has been getting drenched for 3 of the last 5 days.

Along with tornado's.

hambone's picture

Ok - somebody explain why the 10yr T yield is tanking as if there will certainly be no QE3?  Dropping like a rock and although massively manipulated, truly seems there is no exodus as Fed's couldn't buy enuf T's if everybody wanted out...???

Metals saying massive inflation, dollar tanking, but bonds saying deflation again?  Both manipulated but still glints of true expectations in both...

Absent QE I guess I would think T yields would rise w/ spending unchecked to pay for all these social programs???

ghostfaceinvestah's picture

Why would the response be any different than last time QE ended: stock market tanks, USTs rise in a "flight to safety"?  That's how I expect it to play out.

Boston's picture

Yup.  And for more, see Jeffrey Gundlach's explanation in Barron's cover story......from a couple of months ago.

This is playing out EXACTLY as predicted.




alien-IQ's picture

"I quit I feel much better"

Woody Allen

Tracerfan's picture

My administration will not count unemployed people who give up looking for work because there are no jobs available.  They simply don't count anymore.  A neat trick, don't you think?  Makes the unemployment rate lower and helps me with my reelection campaign.

tawdzilla's picture

After 99 weeks, you cease to exist as far as the gov't is concerned.

Kinda makes people long for the good ole days when they were considered "just a number."  Now, they can't even say that.  This must feel a bit like being buried alive.  People are still thinking and breathing while the gov't is shoveling dirt over their body.  These are morbid times.

Don't get me wrong, I don't think we need to extend unemployment benes past 99 weeks. But if these people are still unemployed after 99 weeks, they should still be classified as unemployed, whether they receive benes or not. 

SoNH80's picture

U.6 is the only official unemployment measure with any semblance to reality.  Welfare state for the money center banks expands = welfare state for the "little people" contracts.


RockyRacoon's picture

I thought we were told that when the sit-on-your-lazy-ass-and-watch-TV money ran out these folks would go out and get a job?   Ooops.

StychoKiller's picture

Are SNAP cards being used as currency?  Check your premises.

RockyRacoon's picture

You're scary.  We think too much alike.  I wanted to go there but wanted to keep the snotty remark more confined.   Thanks for expanding the idea.

disabledvet's picture

As they say in "divorce as in investing hope is the enemy."  Perhaps should Marx's "tragedy become farce" which is all i've been saying since I got here  "we get the re-marriage" as "the triumph of hope!"  enjoy!

topcallingtroll's picture

Now is my time to troll!

Some people just wont look for a job until benefits run out.
Some people just refuse to take that mcjob until they have no choice. Some people think they are fighting the system by sitting on their ass collecting unemployment.

Everybody works. Nobody quits. If you do I will kill you myself.

Everybody hustling and pulling the wagon lightens the load on all of us serfs.

End unemoloyment benefits now. That would be a true green shoot.

Quantum Nucleonics's picture

Your thesis is actually well supported by academic research.  Many, many people just happen to find a job the week their unemployment expires.

StychoKiller's picture

Dems what don't find a job, do they just start a starvation diet, or what?

Andre's picture

Are they the same academics as the ones on the "global warming" panels?

And what kind of jobs do they find? 7.25/hr? $13/hr, but 20 hour weeks?

All the support for this claim comes from PhD's. Just like Ben Benanke, Michael Mann, and a bunch of other grant whores. People with agendas and connections, and in some cases perhaps, tenure as well.

The real world is a little bit different.

kaiserhoff's picture

Do women with big tits work?

Do Banksters work?

Does the bureaucrat/parasite/union thug class work?

Do the self-anointed chronic poor/section 8 housing volk work?

When work once again has some sane relation to wages, I will share your angst.  Until then, please target your wrath carefully.


knowless's picture

go to craigslist, make an ad for a part time entry level service job, see how many applicants you get. results may vary.

SME MOFO's picture

Please wait for a site operator to respond.

You are now chatting with 'Gabbie'
Welcome to xxx, how may I help you?

p: Hi Gabbie

p: are you here

Gabbie: Hi P. How may I help you today?

p: i was just wondering when you were going to offer me a job

p: i made 15 winning trades in a row

Gabbie: I'm sorry, if you are interested in applying, you will need to contact our HR department and submit your resume

p: I made 15 winning trades in a row, don't you offer people a job when they do that?

Gabbie: We do not

p: how many in a row do i need to have?

Gabbie: We do not offer employment that way.  You would need to submit your resume

p: what would be on a resume that has more information than a statistically significant trading record?

Gabbie: A resume should include a summary of relevant job experience and education.  

p: what possible difference could that make if I can trade without making mistakes?

p: are you able to see my trading records from this year?

p: hello?

Gabbie: I apologize for the inconvenience, unfortunately I couldn't tell you for certain if it would even matter.  You are more than welcome to submit your resume to, and it will be reviewed.

p: um, you aren't interested in hiring people who only make winning trades?

p: im confused, someone told me you try to hire people with 15 winning trades in a row

Gabbie: I am unsure who relayed that information but that is not the case. You will need to submit your information to the HR department

p: wait, it just occurred to me, you are in a customer service center in India, right?

p: Maybe they don;t tell you guys about that deal

Gabbie: We are located in the US

p: Um, but they always tell you guys to say that no matter where you are right?

Gabbie: Is there anything else you want to cover?

p: Are you able to see my trading records?

Gabbie: Yes, we can see them.  Trading records are not a primary consideration in hiring.  If you have any questions about your account let me know.

p: well, i was just wondering how many winning trades in a row i need to get a job, or is it a dollar amount i need to hit?

p: or maybe a percentage gain

p: oh, I just realized, are you using sharpe ratios to discount the trades?

p: so some trades don't count as much as others?

Gabbie: Neither.  Trading or trading gains are not a factor.  And we are not currently increasing the staff.  Also, your fifteen winning trades are all silver future purchases, so you aren't really exhibiting any real "strategy".

Gabbie: Congratulations on your trading gains.  We wish you continued good profits but this is not a hiring indicator.

p: maybe some of your losing traders can be let go to make a spot for me, I won't say anything

p: In fact, I can still trade from my house, nobody will ever know

Gabbie: Since we don't recommend trades for clients, your ability to trade has no bearing on your ability to provide client services.

Gabbie: And now that we have thoroughly covered this topic, please let me know if you have any actual questions regarding your account.  If not, I will sign off, and please have a good day

p: oh, someone told me you use customer trades to front run your own portfolio

p: i thought you need traders for that

Gabbie: If there is nothing else I will sign off now, thank you, and if you need anything else do not hesitate to click on Live Help.

Chat session has been terminated by the site operator.

knukles's picture

Moments later an e-mail shows up in your in-box:

Dear Mr. P,
Thank you for your interest in Lehman Brothers.  At this time all applicantions are being redirected to the Federal Reserve Bank of New York.  Please refer to www.http//usgov. dickuments/FEDup/IlovetheBernak/suspicious/maybe-sometimes-donotbendfoldspindleormutilate/:{, WTF?
Please read all 374 unacssociated instructional pages carefully before filing the applicaiton complete with your resume, which will need a notary public endorsement or signature guarantee from a solvent financial institution for consideration.
Dick Fold

riley martini's picture

 That job at McDonalds looks a lot better when one runs out of food . They now have their choice of PHD applicants. The service is outstanding but they still need the clown because the food is blah.

DosZap's picture


They are fighting the system...................Welfare recips, DO NOTHING for the majority of their lives, draw checks and foodstamps for FREE.

The folks on UE at least PAID for the 99 weeks of UE or the majority of it, if their over 25yrs old.

The only folks who get something for nada from the US Gvt, are the truly disabled, and illegals, and people who are 4-6th Generation Welfare leeches,and the majority of governmet sector workers, who have  a job(position) we do not need , with an agency that should have never been formed to begin with.

Kik back, n' pass me anudder Big 40.

slaughterer's picture

What is wrong with silver today?  It would seem it would have everything going for it.  But it is nearly negative on the day.

hambone's picture

There is a disturbance in the force -

10yr T's are flying out the door like 3.30% on a 10yr is a hot deal.  Dollar is a major turn or burn moment and reversal (even short lived) seems likely?  And here comes the bear attack on all PM's...

topcallingtroll's picture

The troll grudgingly admitted all you silver bugs were right, which usually means you are wrong.

Oh....and dangertime capitulated....look out below!

TraderMark's picture

Videos from Elizabeth Warren's appearance Tuesday on The Daily Show