Initial Claims Spike To 360K: Highest In Two Months

Tyler Durden's picture

Now that Bernanke has thrown in the towel and reverted back to the old bad news is good news regime (or did he - GETCO's vacuum tubes at least sure seem to think so), there was hardly anything more the market could ask for than a horrible Initial Claims print. It got just that with today's initial unemployment claims which soared from last week's upward revised 344K (only +1k revision this time) to 360K, well above the consensus (and Joe LaVorgna) forecast of 340K. Sure enough, the BLS said the July claims were difficult to seasonally adjust, so let's look at the NSA claims which jumped by 49,778 in the week ended July 6 to 384,829 making one wonder if the BLS' instruction in the holiday shortened week was to actually represent a worse economic reality unlike during the Obama pre-reelection months. The only other notable item in the report was the ongoing drop in Extended claims, with EUCs down by 23K to just 1.6 million, 1 million less than a year ago as claims exhaustion means ever more people drop out of the official labor pool. Permanently.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
GetZeeGold's picture



We're dialed in....don't change a thing.

spine001's picture

I have lost my analytical skills or Bernanke reaffirmed that they will taper. He talked about the "extraordinary" measures like QE3 unbounded and especifically clarified that it wont be infinite. The only thing he said is that the Fed will remain dovish with low interest rates. But that the extraordinary measures will be removed. He even talked about his goal being preventing bubbles bigger than the current one from forming, implicitly accepting we arenin a bubble now. You do need to readnbetween the lines and analyze what he is saying in the Q&A part.

Believe otherwise at your own peril.

His voice tremors, his ehhh, etc clearly indicated that he isnconcerned about financial instability. That and the mathematics of the situation regarding stability boundaries, clearly place a hard limit on the amount of QE they can do, his body language suggested that they know this.

franzpick's picture

I think we've been on the verge of credit and market psychology collapse since Nov. '08, and the fed sees how really bad things are, as well as an apparent need to attempt to micro-manage both markets and psychology; it's not unrealistic to me to envision that they see a bad initial claims coming up for example, in markets about to break major 7 month uptrends, and suddenly call a late afternoon credit boost-a-thon (totally reversing months of badly ending trial balloon taper talk BS).

[Hey NSA, how's this sounding so far?]

They've done many impromtu, mid-crisis pep talk broadcasts before, and any unscheduled and immediate public announcements that result in surprise, market positive, 'policy' reversals, and knee-jerk market moves,  will be viewed on my screens with apathy, temperered with indifference.

spine001's picture

Do not believe anybody a out Bernanke, just listen to the Q&A partbof hisbspeach, everything is there.

LongBalls's picture

The Bernank was just using speech to let a little air out of the bubble. If you were buying gold here then good for you. People have such short memories. Remember, the threat of tappering is just a good as tapering. Threatening the markets is all the Fed has left. They WILL PRINT. If not the US defaults. 

WarHorse's picture

Bad news ... excellent my equity holdings will rally today .. thanks Uncle Ben ... you putz

Silverhog's picture

Recovery Summer 2 1/2 in full swing

Caviar Emptor's picture

Halloween is Wall Street's new favorite holiday!

max2205's picture

EUC's need to be extended to 4 years...

Croesus's picture

I was talking with a friend yesterday........and between the 2 of us, out of all of the people we know, NOT 1 is using that degree they spent 4 (or more) years studying for.

I'll grant you, some of them went to school for useless crap, but we were also able to come up with quite a list of names of people with degrees you'd think would be 'sure-fire'.

Recovery, my ass.


spine001's picture

It is a lot worse than you think. To understand that you need to run the numbers and discover that for every person you know with a degree, there are 10 with a PhD in Asia in the same field and all willing to work for a fraction of what people make at a McDonalds in the USA. If you look at the numbers now, when we compete with Asians on high school reading and comprehension, and math skills, they beat us by a lot. Put that together with the predictions from the BLS that nearly 50% of the jobs in the future wont require much education, now add globalization to the mix and you have a recipe for disaster in the usa. The ruling class knows this, Bernanke even discussed it using complex concepts and words, meaning speaking over the head of most people, in Congress when he gave his first speaches post bail out. At the time he was talking about structural problems in the labor force and the econony as his biggest fear. Well it is not a fear anymore but our current reality in a Ponzi financial world, where the Country with far the most debt and irremediable labor and political problems, who is also running the Ponzi scheme, us, outguns the rest of the world put together. Sounds like we have mixed, and now we dont know how to handle it without major harm.

By the way, do I need to mention that the guys running the Ponzi can destroy the world several times over?

Now, do you understand the real problem underlying everything else that's happening? 

If you do? Sorry for ruining your day... or life?

ekm's picture

That's why I say Rate Hike is imminent


QE harms the economy.

By saying we have to continue QE until the economy improves, it shows this is setup to lure suckers like in 2008.


Anyday now, anyday, this thing goes down in dust

Cursive's picture


I agree with most of what you say, but an imminent rate hike?  How the hell could that be spun politicaly?  The country is addicted to easy money.  If rates are to rise, it will be the work of bond vigilantes.

ekm's picture

The way I see this: 
The Fed has only mandate and one only: Maintain the USD as a world currency.

Let's see what QE has done in that regard:

1) Currency swaps between different countries and China including anglo allies like UK, Australia, thus USD avoidance
2) Yuan settlement increased from 0% in 2009 to 12% now.

Experiment is over IMO. Reverse shock is coming.

There is one mandatory factor to use a currency: Positive Real Interest Rates

Otherwise, in few years, bye bye USD

fonzannoon's picture

I am halfway there with you ekm. I see yesterday proving two things.

1) Bernanke needs to cut purchases

2) He can't allow rates to rise

That leaves one option. Go ahead and look to cut purchases, and try to hold the bond market hostage with his comments while he does it.

This explains the move (somewhat) in crude oil, which is becoming the defacto bond vigilantee, since Bernanke can somewhat jawbone rates. I don't think a rate hike is coming by any imagination. But this bubble is going to pop somewhere.

Francis Sawyer had an excellent thought on the move in crude on another thread

Caviar Emptor's picture

Reagan proved that deficits don't matter
Obama proved that debt doesn't matter
Bernanke will soon prove that the currency matters less and less and less

sudzee's picture

Borrow from the future? Well, the future is here. The bernank dipped his toe into the IR waters and got smacked in the head by the past. Nowhere to go except moar, moar, moar. It isn't different this time, on a long enough timeline all fiat goes to zero.

Cursive's picture


Yes, BernanQE has boxed himself into a corner (and admitted as much last night).  I'm not so sure about a rate hike to protect the USD.  Central Banks love to devalue their currency.  Look at the BOJ.  I think the path to protecting the USD will be military action (in addition to the many, many wars Amerika is currently fighting).

ekm's picture

It's the stick and carrot methodology


Military is the stick, but carrot is mandatory

Zero interest rates removed the carrot.


It doesn't work and it's not working. Even UK is doing swaps with China.

Frankfurt wants to be a yuan hub.


Cursive's picture


Well, it would be a welcome relief from the financial repression we've been dealt the last 4+ years.  I enjoy reading your insight....

fonzannoon's picture

If an interest rate hike happens very soon I will ask Tyler for permission to upload a picture of me kissing my own ass.

The question ekm, is, now that you have stirred the pot for a while now and got everyone all riled up...what are you going to do if we are sitting here in 2 months and nothing has changed?

Everyday for the last 2 years I hear an ad on the radio that says "In the next 18 months something is going to happen that will change the world as we know it..." followed by 7 spectacular post predictions of what we all should have done in the last 3 crashes.

I don't want you to be that guy.

SheepDog-One's picture

The problem with addiction is more of it doesn't just mean smooth always ends in overdose and death.

GetZeeGold's picture



Hike rates? I suppose suicide is an option.


Personally I'd try some other stuff's time for some Calvin Coolidge strategy.....but I don't think the current marxist administration is going to go there.


Remember the depression of the 1920s? Yeah....neither does anyone else. Now that's success.

Cognitive Dissonance's picture

"Hike rates? I suppose suicide is an option."


Through early morning fog I see
Visions of the things to be
The pains that are withheld for me
I realize and I can see

That suicide is painless
It brings on many changes
And I can take or leave it if I please

SheepDog-One's picture

If they wait long enough for enough people to die, then they can do whatever they want and no one remembers a thing.

Quinvarius's picture

Because you understand the consquences of that, do you?  No.  He will stop paying interest on excess reserves as his only option.  Nothing else the Fed does can be changed yet, except more QE.

CheapBastard's picture

<stop paying interest on excess reserves>

Now there's a thought.

overmedicatedundersexed's picture

obvious strong employment, what will ben do? this is good news , when we get to 500,000 it's fundamental change we were promised

new game's picture

keyword - spike. be advised - don't drink the koolaid

SheepDog-One's picture

Setup to draw every last sucker onboard and then pul the rug out? 

I've been thinking that's surely what's going on for a long time, but hasn't actually happened yet.

thismarketisrigged's picture

serious question here.


why the fuck do they even release ''data'' anymore?


im being as serious as i can be. the only thing that fucking moves this market are words from fed officials, and of course when bernanke speaks.


does it really matter if jobless claims were at 5,000 or at 500,000? the market would be green anyways.


this shit is ridiculious. so predictable,  we all knew that asia would be up 2-3 percent last night, followed by europe today, and of course the u.s will be up god knows how much today on words of 1 giant douchebag.


data means nothing, as we all know its simple. he keeps printing, things go up. once he stops, game is over. there is no economy.

yogibear's picture

So far the Fed is the market.

All this talk about the market being more powerful then the central banks has been proven wrong. It just hasn't happened.

I heard countless times the Fed doesn't control the long-term rates. What does the central bank do, control the 10 year.

fonzannoon's picture


They release data because the algo bots are trained to move off of headlines, and 80% of the market is algo bots.

oddjob's picture

much like your deflationist garble.

Save_America1st's picture

Because they have algo's to feed and manipulate???

Just taking a stab at it...

scatterbrains's picture

He's going to have to print faster than the effects his printing causes oil to rise.. then with $5 gasoline everyone will find jobs.. perfect.

new game's picture

long civics and corollas

Lndmvr's picture

5 years doing insurance inspections. There has been NONE in last 2 weeks. Are the insurance companys holding cash for some reason?  I see myself entering the above numbers soon.

salimmk's picture

Do the robots read this headline too?

derek_vineyard's picture

ben actually cited under-employment and alluded to the fallacy of the 7.6% reported rate in his to the point dovish statements.

world rates have been rising in tandem wuth the US's threat of end QE, but as we all know the race to de-base is global and the biggest player cannot exit.

i really think the taper-talk was aimed at risk asset prices (like the irrational exuberence attempt a few years pre nasdaq pop), but the actuality of servicing debt at higher rates is not acceptable and the spike in interest rates was so intense and quick the Fed realized they better clearly retract or the crisis we all know is coming would have been fast forwarded

guess the best hope is doing a Japan , but history seldom repeats exactly

economictsunami's picture

You can imagine my unsurprised look after running across this article:

‘No-work’ jobs cast shadow over Britain’s labour market

ejmoosa's picture

As soon as anyone on CNBS parrots the "strengthening economy" line, I know they are a non-thinking lemming.  We have been strengthening for so damn long, we should be the fittest economy bar none.


Will they EVER be honest with themselves?

Only the Mr. Mooney look alike questioned the Fed, even questioning the minutes from previous meetings, suggesting they are not an "honest record". He is the chief economist for FAO Economics.  Said the Fed cannot kidding.

Rip van Wrinkle's picture

They don't receive a million bucks a year to 'be honest with themselves'. in a criminal economy, if you don't tow the company bull, you're out on your arse. And where the fuck is the likes of Quick going to get another job paying the money she 'earns'?

highcapacity's picture

Everything is fine...recovery is doin awesome ..... jog on.

oh btw Fuck u Bernankino

irie1029's picture

Yesterday Regal Beloit announced closing MO plant and moving 330 jobs to Mexico.  

Mad Mohel's picture

Fuck that Bernank, break his fuckin back the old country way!

new game's picture

long english as a second language for pesos!

Confundido's picture

Did anyone notice that the market did not react to this numbers as much as to the f... jawboning of the central bankers? Markets have called their bluff!