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Now for some bad news: jobless claims
Jobless claims in the current week fell to 359K from 364K. But we previously thought claims were at 349k so a drop of 5K would have left them below 345K. Not now.
The problem is NOT -NOT- the week the problem is that the benchmark revision has done damage to a very favorable trend.
The benchmark revision has sucked a lot of the downtrend (a good thing for jobless claims) right out of this time series.
Claims are averaging an increasingly higher figure above the previously-reported levels. The 4wk average from last week is higher than it was in the old data by 14,000. And, the current level of claims is higher above the old level, the fresher are the observations. In other words we are losing momentum faster than we thought and we have made less progress on claims than we thought.
Continuing claims also are higher and progressively higher.Their 4wk average for two weeks ago is higher by 24,000 than it had been previously.
The news on claims is still good. Claims levels still have dropped, and sharply. The insured rate of unemployment is still at a cycle low 2.6%. But the depth of the drop in claims is less than we thought and the sense of ongoing progress is now diminished.
It's a bad news report for optimists.
We will see if its reduced momentum signals slower growth ahead than we thought or if the economy continues to make strides.
Keep an open mind.
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Mr America
http://www.youtube.com/watch?v=ThIVrvRyjtU
Not only are the numbers cooked, but the crazy bastards think the unemployment problem is a business cycle problem solvabe by throwing money at it.
The unemployment is structural, and has been for over 15 years, slowly deteriorating without any intelligent response.
How's those cheap products working out for everybody at WalMart?? Bet now you'd be willing to pay a few extra bucks for the items in exchange for a stable job.
Economic theory is very poorly constructed when it comes to accounting for global economics. essentially, it is biased to explain domestic economies, not global.
Some day soon someone will realize that currency manipulation can overcome a host of structural disadvantages, and give permanent unfair advantage (jobs) to mercantile countries.
So much for free trade.
No, the numbers are not crooked. There is evidence to the contrary. The way the numbers are being used may be disingenuous...
The view on elevated unemployment being cyclical is just one view. But it's the view of the guy who runs monetary policy.
I think evidence points more strongly to structural issues here is the link to the chart on that. There is a companion are article here on ZH.
http://robertbrusca.blogspot.com/
I was at a meeting this week where Peter Diamond spoke (Nobel Prize winner, rejected Fed nominee)...and he just rejected the idea that it was structural even after being told about the evidence. He did not have any good reply; he muttered in academic mumbo-jumbo how he'd like to see more data statistical work...yadda yadda.
Sorry this man is not open-minded.
An economist is someone who will not believe he has a nose on his own face unless he sees a 'T" statistic to prove it.
When economists get buried in their own little enclaves of thought there is no longer any convincing them with the facts.
I'm still struggling to figure out if Bernanke really believes the cyclical story or if he has simply decided, based on the lessons from the Great Depression that we must find a way for policy to pursue a stimulative course until we see an undeniable upturn. That would mean finding 'the reason' for continued easy policy where ever you can even if it is not in the facts of the moment.
Of course Fed Chair Arthur F Burns played a shell game with money aggregates M1 though M5 to get the policy he wanted and it led to an inflation disaster. But it was the policy he thought was right (run an accommodative policy to blunt the impact of rising real oil prices).
So yeah it makes me wonder about Ben. Everybody else on this site is much smarter than me that 'they know;' I am still wondering and trying to figure things out.
There is no need to pay more. The need is for big retail to take less in the way of margin, allowing quality products to be manufactured and sold without harming the finances of regular Americans.
The problem is scale. Just like a bloated central government, the waste generated running a business the size of Walmart causes it to become insolvent without 80% operating margins on the majority o what it sells.
Corporations like Under Armour actually made more profit when they sold $250 million that they do now on $1.4 billion. As they grew they got further sucked into the profit killing margin compression of mass retail. They however no longer care about net profit as it has virtually no bearing on their stock performance. Stock performance for shareholders is the pricipal requirement of business today, not sales to the consumer or quality manufacturing.
The real reason for the death of private business is that it is impossible to generate enough net profit to make the business worth while. Would you really produce a product in the USA for $5 when mass retail requires a wholesale price of $6 for $20 retail? Sure the retailer could pay $10 and still make 50% margin, doubling their money. Or perhaps we could return to the days where the net profit to the manufacturer and retailer were equal.
Retail prices don't need to rise. Mass retail needs to die. Unless you think paying $20 for a chinese trinket actually manufactured for less than $1 is the pinnacle of modern capitalism.
Unless you think suckering people into paying $20 for a chinese trinket actually manufactured for less than $1 is the pinnacle of modern capitalism.
There, fixed it.
Exactly
There is no Captain America and the spin will continue. Politics is alive and well in the U.S. and real numbers or bad news will not be tolerated.