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Just How Bad Is This Week's Unemployment Claims Data? Not Bad At All
Just How Bad Is This Week's Unemployment Claims Data? Not Bad At All
Courtesy of Lee Adler of the Wall Street Examiner
The mainstream media today reported an increase in initial jobless claims this week to 380,000, an increase of 13,000. This was another huge miss for the consensus of conomists, where the central tendency of expectations was for 359,000 initial claims. The conomic establishment continues to prove its worth week in and week out. The question is whether these people are just clueless or willing instruments of the Wall Street distribution machine. I'll leave that for you to decide. The issue today is whether the number of claims is anything unusual. Does it represent a sign that the economy is weakening?
The media and conomic pundits report claims on a seasonally adjusted basis. That is a fictional number designed to eliminate normal seasonal patterns in the data in order to represent an abstract impressionistic version of a smooth curve for consumption by the masses, which the conomic establishment assumes is too stupid to understand real data. It's a very strange device because it is a simple matter to compare the current performance of the actual number, in other words "reality" with the reality of the same week in past years.
The Labor Department (DOL) does publish the actual number. This is not a survey sample, but an actual compilation of the actual weekly claims, which each of the 50 states submits to the DOL. The DOL warns in the weekly release that the current number is an advance number. The fact that the number is revised up every week is simply a matter of the fact that the initial count is not complete. This is not a survey, and not a sample. It is the actual number reported by the 50 states. The number reported next week will be the final number for this week. The DOL is very clear about this. It reports in today's press release that, "The advance number of actual initial claims under state programs, unadjusted, totaled 381,875 in the week ending April 7, an increase of 62,530 from the previous week. There were 448,029 initial claims in the comparable week in 2011." Highlighting is mine.
Can it be any clearer? The DOL spoon feeds this data to the media and the conomic establishment, and they completely ignore the facts. Rupert the Hacker's Wall Street Urinal posts an article claiming to be mystified by the weekly upward revision, when this is a normal part of the process. The number is revised up by 3-4,000 every week. Downward revisions are extremely rare, in fact, they almost never occur. The circumstances would have to involve a larger error in a large state submission. It just doesn't happen under normal circumstances.
The advance number for actual claims is down by 66,154 or 14.7% since last year. The total number of claims will be revised up next week, so that in the end the difference will be closer to 60,000 or something on the order of 14%. There are many reasons for the drop and you can find negative arguments, such as that fewer workers are eligible to file claims (not true), but the fact is that far fewer people are losing jobs this year. New claims this week as were 0.29% (29 hundredths of a percent) of current total nonfarm payrolls. In the same week last year they were 0.34% (34 hundredths of a percent). So the decline in claims is not a matter of fewer people being eligible. A smaller percentage of the eligible are filing claims. Fewer people are losing jobs.
The weekly jump of 62,530 was a big number, but this is part of a normal seasonal pattern. Last year in the same week the increase was 94,212. In 2010 it was 93,631. By the standard of the last 2 years, when the economy was in its initial rebound off the depression low, this year's number is an improvement. It is not as good as during the bubble years from 2003 to 2007 when the gain during this week ranged from 40,000 to 60,000, but it's not a bad number by recent standards.
Wall Street would love to see an excuse for the Fed to do more printing and market propping, so its conomic mouthpieces have ginned up a phony consensus estimate of a phony construct, the seasonally adjusted number, to give the market an excuse to sell off. The players strapped on the dynamite vests and walked into the Eccles Building with their thumbs on the dead man switch, all based on the lie that this week's number was a bad sign.
Here is a chart of the actual data.
Initial Unemployment Claims Chart - Click to enlarge
That is a picture of the facts, and the fact is that the current level of claims is right on trend with the trend of the past 2 years. There's plenty of variance week to week, but the trend has been stable, with weekly year to year change ranging from 5% to 20% since mid 2010. This week's number is completely consistent with the trend. People can argue with that all they want, but they'd be arguing with the facts. Many people will start with the argument that the DOL is lying every week. That's a personal choice that everyone is free to make. In my study of a variety of data, I look for logical inconsistencies, and I'm satisfied that the DOL data is reasonably accurate.
The greater problem as I see it, is that people reading the mainstream media and listening to the conomic establishment, are unknowingly being engaged in fiction, and that makes it completely impossible to get at the facts. When you look at what's real, instead of the seasonally adjusted nonsense and the conomists ridiculous interpretations of it, it's absolutely clear that there's no sign, no hint, not a scintilla of evidence, in this data, that the economy is weakening.
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It's public information, freely available from published public sources. Pick up the phone and call the DOL switchboard and ask if you're too lazy to do a web search for the press release.
Why are you so angry? Besides, if you've already made up your mind that I'm a dumb fucker and that all government bureaucrats are liars, then what's the point of arguing. Your mind is made up. You're not interested in determining the facts or making objective judgments. You already know all the answers. You've already informed me of what I am. End of story.
Will they have TSA agents outside and will the reporters have to show photo ID's to gain entrance to the "lock-ups"?
So, if BLS knows the states don't give them the full count every week, why don't they add in the 3-4k everyone else knows will be added the next week?
Everybody knows that the absolute level of employment is catastrophic. I wrote about that here just the other day. My article yesterday was about the trend of claims. Like it or not, there's a strong inverse correlation between claims and stock market performance, and my job is to identify the trend and identify important turning points. The trend of claims is still down, which correlates with the fact that the trend of the market remains up.
I've been called many things in the 12 years I've published my websites, but this was the first time I've been called a bull. I had to chuckle at that.
The idea that the claims data isn't supported by the tax data is false. March gross withholding was up by 2.6% versus March 2011, with the last reporting day this year being the 30th, versus the 31st last year. Total gross tax collections before refunds were up 4.7%. Those are the facts from the last day of the month Daily Treasury Statement for this year and last year.
Hating the facts and hating the deliverer will not help anyone trade the market successfully. Making shit up when the facts don't agree with your negative worldview will not help you trade successfully. Repeating made up shit over and over doesn't make it true, any more than the lies Wall Street foists on you every day.
I happen to share that negative worldview, and have documented the facts throughout the time I've been doing this. Sometimes market trends and economic trends are positive, even though they are at historically terrible levels. That's just the way it works. These things move in cycles. Bull markets happen in secular bearish periods. Those who are constantly in denial about that are doomed to lose. To win at this game a person needs to be willing to seek the truth, accept it, understand how the system works, and put that understanding to work, regardless of the fact that it may be a sham system. That cannot be done if the starting point is to deny the facts and insist on what should be rather than what is.
I invite you to visit with me at the Wall Street Examiner and see for yourself that the search for truth is essential, regardless of where it leads and what unpleasant facts it uncovers.
Thank you for reading my articles, and thanks most of all to Ilene for posting them, and to Zerohedge for running them. I deeply appreciate it. I realize that most of you see me as the enemy, but that's not accurate. I always have been and remain very much one of you- a bear and an archcritic of the system, but my first allegiance is to objectivity. I will not sacrifice my integrity or the search for the facts for anyone or any reason.
And deduct inflation from that percentage and it will become negative. Oh wait, Bernanke told you inflation is less than 2% so nevermind.
Speak for yourself, Adler.
I'm not a bear. I'm a realist.
And you're not "one of [me]."
And also, you're entire thesis is you've presented is riddled with holes and is laughable in parts - especially the part about the government beauracrat who confirmed your "theory" over the phone.
Mr. Adler is right here. Too many ZHers are cherry pickers with regards to data because there's ideology to support.
"Too many ZHers are cherry pickers with regards to data because there's ideology to support."
Too many people are cherry pickers with regards to data because there's ideology to support. - there fixed it for ya.
"The idea that the claims data isn't supported by the tax data is false. March gross withholding was up by 2.6% versus March 2011, with the last reporting day this year being the 30th, versus the 31st last year. Total gross tax collections before refunds were up 4.7%. Those are the facts from the last day of the month Daily Treasury Statement for this year and last year."
And I guess next you will say that the WEATHER in March 2011 was just like the weather in March 2012. The record warm weather this year and it's effect on employment have been discussed extensively.....except by you apparently. We don't need no stinkin' reality!
This article covers the claims data for the week ended April 7, not the monthly jobs data for March, which I addressed in a piece last week. I also addressed the weather issue. If it was weather, wouldn't that have showed up in construction employment? There was no unusual increase in construction employment in March.
But again, that's not what this article was about. This article was about claims in the first week of April. You can't blame the trend on warmer weather indefinitely, unless of course you actually believe in global warming.
See, I can go off on tangents too! But this article was about the claims data in the first week of April and what that data implies about the conomy and the markets.
"But this article was about the claims data in the first week of April and what that data implies about the conomy and the markets. "
I say the narrow focus of your article implies little about the real economy; perhaps more to your area of expertise, the (casino) "markets."
Wow, you ARE the master of misdirection aren't you. Re-read the section of the comment I quoted and then lecture me some more about what I was commenting on Einstein. Oops.....it appears to be about March data.
Lee, you say you're totally in agreement that the "growth" is due to deficit spending. At the same time, you talk about investing with the trend.
But if the trend is by definition unsustainable, how is that "investing"? You're encouraging people to speculate on the thesis that the Fed and Treasury can keep expanding money supply and government debt indefinitely, until they can't. And then, somehow you'll know ahead of time that the bell is about to ring?
Sorry, I can't go along with that. That's gambling with people's life savings. Any sane person has stepped back from these markets, since they're not real capital markets but a horrible Frankenstein of manipulations and interventions.
Thank you for the clarification in order to try to mitigate the litigators.
great writting Ilene-no evidence indeed- nat gas at historic lows, gasoline demand falling, housing at bottoms tax collection in the basement on and on..no need to worry now that Ilene has show us it's just a bowl of cherries.
Mish on unemployment, with charts, last one shows number of employees covered by unemployment benefits divided by the number of people of working age:
"From a peak of 59.4% in 2001 we have plummeted down to 52.2% right now in April 2012. And the number is lower than last year, significantly lower than 2010, far lower than 2009, etc. This does not imply an improving labor market but rather clearly demonstrates the continued deterioration of workforce in the USA and probable pressure on those working to provide even greater amounts of their income to those not working."
http://globaleconomicanalysis.blogspot.com/2012/04/closer-look-at-unemployment-claims.html?x#echocomments
Perfect fade as far as I'm concerned.
Lee has been a great fade as is Brusca. Phoenix would be okay if he'd get away from all the emotion crap. Emotions kill you in the markets.
"No evidence of it weakening"?
I don't either! It couldn't get any worse!
You guys going after 'Ilene' are just attacking the messenger (who is probably a construct anyway). Adler is the author but anyone who goes after him while themselves still engaged in frenetically trading this casino is truly an idiot or hypocrite or both.
It is all well and good to be in the business of 'helping' all these productive 'traders' earn a living. My concern as a member of society whose world does not revolve around daily stock and bond prices is how much valuable energy (intellectual, thermal) is forever wasted in the process. All this mis or mal 'investment' chasing free lunches is really going to bite the day we actually are cold and hungry.
Ilene: Obama Kool Aid maker.
New title: Obama Throne Licker
BB,
You seem to be one of those cherry pickers on the data.
The economy is getting better like inflation is 2%.
To state the obvious, if they want the market to sell off, then all they have to do is free the market and have real price discovery, instead of manipulated prices.
... get the MMs and other "so called" liquidity providers out of the way. Then there will be a real market, not a managed Ponzi market.
But, you aren't asking for that are you?
Because people are running out of bennefits does not mean they are working. I can not believe this is not self evident. Look at the graph of how long it is taking people to find a job. That is more relevent than showing a graph of people running out of unemployment benfits.
Employed percentage in the US has gone from high 60's to 58%. Half of all Americans are unemployed, wow things are fantastic. This is why people do not trust the governments unemployment data.
I suppoisse the argument is the TREND is consistent. Ok, well, yea, but the trend isn't GOOD. It's clear that this re(de)pression is structural. Three years into it and we'e still not in a position of high jobs growth, largely because we don't have any insustries that are creating jobs.
I'm sure a chart watcher can appease our fears by telling us the chart is not as erratc as thenews would tell us, but the fact is, we're still 6 million jobs below 2007 and have added 6 million new people to the rolls. We have 88 million people not working.
Also, since this recession is a carbon copy of 1980-83, it's likely we're going to spike in new claims again, IMO because of the collapse in retail and health care as the country faces the fact that we have to start saving.
Carbon copy of 1980-83?! I beg to differ.
After Ilene's highly left political rant a few months ago, it is no wonder that she's parroting the White House line. To quote Obe-wan: "No, this is not the depression you are looking for..."
Jesus Ilene. Could you be ANY more transparent?
I'm sure that we're also mis-reading the plunging gross tax revenues and collapsing Baltic dry index as well.
You truly are a douche nozzle Ilene.
Gross tax collections in March were up 4.7% versus last March, with one fewer reporting day.
There you go......talking about March again. You are tooo funny dude. You should go back to hanging with the cartoon bears. They seem to appreciate your humor.
You need to set your page view to threaded view. My points were in response to a poster saying that tax receipts were down in March. They were not. Furthermore, they were even stronger in early April. I realize you have a problem with dissonant facts that don't fit your worldview, so I'm sorry that the early April data was even stronger.
And you need to get your story straight and stop talking out of both sides of your mouth like a WH administrative stooge.
Tax receipts were up in March, and are up in early April. I'm sorry if those facts crush your world view. I'm not forcing you to accept what is. That's your choice.
BDI has actually ticked upward from where it was going which was below 2008/2009 levels only a few short month or two ago. Sustainability of that is open to debate. Perhaps commodity hoarding is responsible for the uptick.
They are planning to kill us. What else do you need to know?
I like Ilene. She is the Jamie in my Dimon.
When is ilene going to actually put her own thoughts to words, rather than copying & pasting this Adler asshole for the umpteenth time?
" I'm satisfied that the DOL data is reasonably accurate...."
i would believe it if the correlation with tax receipts were positive....on the other hand, declining tax receipts may indicate lower quality jobs....
Gross withholding taxes were up 2.6% in March vs. March 2011. All of the gain came in the last 2 weeks of the month. There was one fewer reporting day this year as well.
Good God man!!! There you go about March again. You just can't get your story straight can you! You REALLY are making a complete fool of yourself and destroying what little credibility you may have had. So sad to watch. I used to enjoy your stuff on Minyanville, but then I achieved puberty.
#t's absolutely clear that there's no sign, no hint, not a scintilla of evidence, in this data, that the economy is weakening.
getting tired of this bullshit..
if we dont have "sign, no hint, not a scintilla of evidence, in this data, that the economy is weakening" WHY DID WE HAVE 2 MONTHS IN ROW (FEB/MARCH) BIGGEST MONTHLY FEDERAL DEFICIT ON RECORD?
do you even COMPREHEND that 2 month deficit is almost 450 bln $$.. ? its just 2 months deficit.. during of years of Bush Jr. max YEAR deficit was around 500 bln ...
DO YOU COMPREHEND FACT THAT USA IS IN DEPRESSION ? do you understand that during G. Depression of 30x US federal deficit never ever exceeded 5% of GDP?
and for last 2 years of recovery US GOV SPENT 8-10% OF GDP..
DO YOU COMPREHEND THE FACT THAT IN 3-4 YEARS USA DEBT WILL BE 20 TRLN $,
and if and when 10 year %rate will return to 5% , as it was just 10 years ago, only interest on debt will eat up HALF OF FEDERAL BUDGET REVENUES.. and this ponzi scheme will collapse.. ?
DO YOU UNDERSTAND THAT USA GOV COLLECTS AROUND 1.600 BLN IN TAXES, AND SPEND
ABOUT 3.800 BLN IN OUTLAYS? its way way worse than in Japan..
and you are talking about 'not even a hint of weakness'..
alx
ps
NO WONDER you publish this junk for free here..
The Author is correct about the interpretation of the chart. It's a stupid chart. It's like showing a graph of the penguin population in Antarctica and saying there is no evidence of poorer weather in Somalia. Try a chart of U6.
Reminds me of the investment banker that fell off a fifty story building. Just before hitting the ground he was heard to say: "So far so good."
Perhaps the numbers just didn't look that bad this WEEK ... forget the big picture for a moment which has lightning crashing, earthquakes and hurricanes all around and enjoy 1 week where it didn't 'look' too bad on paper. Think puppy dogs and rainbows and say 'ooohhmmm'.
Tyler puts Ilene's column in just for a spin-up.
Works every time. It's like when you were a kid with a magnifying glass focusing in on the anthill. Example: Ilene publishes a few paragraphs of plagarized drivel. Tyler gets his magnifying glass out (figuratively...puts in ZH) and watches the ants go berserk.
Gotta appreciate the comedy value, doncha know.
Don't even tell me you didn't magnify the anthills...or pull wings off of flys. I did and I'm perfectly normal.
Balliff, pour a-w a drink. There is something desperately off in the balance of mindset when a number that churns by a few percents gives satisfaction to folks like ilene - it is as if she suddenly noticed the gloss on the burled walnut in her stateroom on the Titanic is better appreciated when the ship is on its beam end. Speaking of which, I could use some Beam myself, bailiff....
No question about it. Deficit spending is driving the "growth." When they begin to cut back on that spending is when the numbers will start to come down.
Trading is about identifying the trend and staying with it until there are signs that it is ending. My work is about helping traders and investors to understand this treacherous, manipulated environment, to survive, and to grow their capital. Those who make the trend their friend, win. Those who fight it, lose.
Don't fight the tape. Don't fight the Fed.
Know the enemy. Seek the truth.
"My work is about helping traders and investors to understand this treacherous, manipulated environment, to survive, and to grow their capital."
So what you are saying is, that you are doing God's work for JPM? Now I understand.
You want us to seek the truth reading this propaganda? You isolate one variable out of thousands and you claim there is 'no evidence'? Then you come on here and tell us to 'seek the truth? Wow...
The current trend is print, print, print to hyperinflation. If you think you can ride that and get out before getting burnt you're fucking delusional. Did the last 4 years teach you nothing? The Flash Crash? Jon Corzine?