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Jobless Claims Spike Is Fourth Largest In 2012 As Producer Prices Surge By Most Since June 2009
While hardly a factor in the Fed's thinking which is due to present its announcement in 4 hours, today's Initial claims report came at 382K, the biggest miss to expectations (370K) in 2 months, and up from last week's naturally upward revised claims of 367K. The 15K jump is the biggest weekly spike in 2 months and 4th largest this year. Just as relevantly, as we warned months ago, those on extended claims continue to run out at a fast pace, with 41K people losing their extended benefits, down by nearly 1.8 million from a year ago, and are forced to seek disability benefits to keep the government dole running. More importantly, and just as Bernanke is doing his best to stoke inflation, producer prices soared by 1.7% in August, up from July's 0.3%, and well above expectations of 1.2%. This was the biggest M/M spike since the 1.9% surge in June of 2009, and was driven primarily by soaring food prices, which however as everyone knows, is not really a factor in the Fed's thinking. "On an unadjusted basis, prices for finished goods climbed 2.0 percent for the 12 months ended August 2012, the largest advance since a 2.8-percent increase for the 12 months ended March 2012." Then again, who out there needs food or energy - inflation is precisely what Bernanke wants, the FOMC will welcome this news with open arms. But at least the Fed will create jobs and get people to give up on renting which is the New Normal buying, and scramble right back into the housing re-bubble.
MoM PPI jumped the most in over three years...
as initial claims jumpe to its worst in over two months...
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Spike Is Fourth Largest
Damn.....almost good enough for a medal.
> which is due to present its announcement in 4 hours
I thought the Fed announcement is at 2:15pm?
Still is......it's tradition.
12:30
12:30 pm today. They moved it up.
Rutrow......I don't think I like the sound of that!
correction: ruh roh
Nah RUT roh will be correct if BB disappoints. But that's not programmed preapproved thinking and independent thought is illegal, so forget I said that.
But at 2:15 you get to hear the Bernank speak. It's always fun to have two windows open when listening to him, one to get his weasel words and one to watch the price of gold. The price usually either ramps or craters. Particularly memorable was the Congressional testimony when 'someone' sold paper gold equal to Brazil's national reserves during the transition from Ron Paul's to Maxine Water's questions. Could be interesting today since there's almost $200 to hard support and no clear resistance. Good times.
No clear resistance is absolutely true. I'm going to do today what you described. It should be fun.
The Fed statement is at 12:30.
The explanation of the statement is at 2:00.
The movie opens Nov 6th in a voting booth theater near you.
<Can you make that fried rice banker to go please.>
Good? That's greaaaaaaaaat!
Just claim targeting nominal GDP, declare victory and a partnership at Goldman
But Keynes said there is a "multiplier" and that government spending is great for GDP. Saving is bad, real bad, nasty bad. We can't have any saving. Just keep pumping in more and more money when times are bad and all will be good. What's that? The government saves during good times? Bwahahahaha.
these people didnt lose their jobs on their own...they couldn't have done it without the govt....
bullish...release the qe krakon
I wonder if the Bureau of Lies and Scams would ever allow a 4-handle to print on initial claims this close to President BackNine's re-election day?
Or would they print 399K only to revise it to 410K the next week when it drops to 398K, while the media shouts "WE'VE TURNED A CORNER!! FUNEMPLOYMENT NUMBERS DROP!!!!!!"
I'm guessing the latter is far, far more likely.
Anorexic pedestrians don't see any inflation here. Nope.
Transitory.
So if the Fed start tightening then the drought will go away and food prices will come down?
Print some corn, bitchez.
Oh, the irony! Today is yet another Fed day and the Ghost of Monetizations Past surfaces throwing this feces of a UE claims report at Benron. Yes, Benron, this report shows that you've solved nothing (because you can't) and created more problems via inflation. Checkmate for any hopes of New QE.
The only place QE was going to happen was in the minds of the MSM.
Jaw,Jaw is the only menu item today.
War,war maybe next.
So when does the Fed start handing out free ecstasy to the Nouveau Poor? Cue e!
WE'VE BEEN WAITING FOR THE MARKETS TO WAKE UP TO REALITY AND TODAY IS THE DAY WHEN FINNALY EQUITY INDEXES LIKE SP5 AND DOWN WILL SINK, IN PARTICULAR, FINANCIALS AND HOUSING STOCKS. WE CONTINUE SHORTING EURO,AUD AND GBP BUT LONG GOLD AND SILVER, CHF, USD, CAD AND MXN....OF COURSE WE HAVE NOT FORGOTTEN FACEPLANT WHERE HE ARE MASSIVELY LONG
Ask your doctor if Zoloft is right for you.
4 out of 5 Feds recommend Ponzonium, the little green pill, with unlimited refills .... er ... prints.
1 of 140 000 Russians recommends Polonium 210... though we still don't know which one.
Gas by me is now $3.99 .. I'll give Ben a week to see how he did with todays policy decision.
We're moving forward.....should have it at $4.50 in a couple days.
Well, this should change in the near future. I see us need a lot of construction workers and replacement embassy personnel in the near future. Shovel ready jobs...
The Fed needs to hit the ball back into the administration's court and stop funding their spending spree.
But you're forgetting that the political and monetary scientists are conjoined twins, joined at the hip.
But wait, these numbers are supposed to go to Zero at 12:30 or 2:15 today?
Can someone please explain something for me?
How in the world is the labor participation rate the same as it was four years ago, but yet the unemployment is 2% lower today?
So 8-12 million people drop off the rolls which might account for par with new entrys but where in the world does the drop account for?
Has the drop off the rolls ever kept up with new participants? And just how many have dropped off in the last four years.
This math is jacked up.
While Zandi and friends say but, but, but it's a formula when Rick S talks 7.9% in Nov.
I do not know about how they cook the inflation numbers, but the bill for the same food basket, non existent as an item in the inflation stat, I have been buying for many years, compared with an year ago, is 20% higher.
Sorry, we're not supposed to notice things like that. Back to the re-education center for you.
"was the biggest M/M spike since the 1.9% surge in June of 2009, and was driven primarily by soaring food prices, which however as everyone knows, is not really a factor in the Fed's thinking."
BS - food and energy inflation IS a primary concern of the Fed otherwise we'd be looking at QE8
right now.
Hey, wasn't the convention last week? When you run th ecompany, you get the number you want...
FORWARD SOVIET!
Hey, wasn't the convention last week? When you run the company, you get the number you want...
FORWARD SOVIET!
Bad Initial Claims: Blame It On The Financial Storm
http://chartistfriendfrompittsburgh.blogspot.com/2012/09/bad-initial-cla...
I got one better,
Isaac
More: Tropical Storm Isaac boosts US jobless claims - @Reutersbullshitist, long ink and paper!
PRINT PRINT PRINT!
how much of the 1.7% MoM increase in PPI was pil?
Stagflation is starting to come in. Soon we will have wage inflation and corporate margin compression and long bond starting to decline. Since inflation is coming, not need to print more, Bernanke has succeeded moving us out of hte hyperinflation versus deflationary collapse. We are starting to move toward stagflation, mortgages will get easier to repay, bond traders, stock brokers you are fucked. If Gold and Silver plunge because of no printing let it form a base because the only reason the Fed will stop printing is because stagflation is starting finally (slowly at first).
You're kidding yourself if you think we'll see wage inflation. Producer margins will compress to zero, or negative. Everyone I know with a real business, ie not publicly traded, is trying to sell.
They can't raise wholesale prices, and they can't lower input costs. There is no profit to be made, so there is no point in doing business.
THE FED[s OBJECTIVE IS TO MOVE THE ENTIRE PRICE STRUCTURE UP, THE EQUITY AND BONDS HOLDERS THOUGHT THAT MEANT HIGHER PRICE FOR CAPITAL, BUT IN FACT MOVING PRICE STRUCTURE UP HURTS CAPITAL, this is the Beautiful deleveraging.
You are kidding yourself if you do not know the inflation numbers between 1937 and 1950. Does that mean consumer were better off? WHo said that standard of living increase with wage inflation? They don t, but it makes it nominally easier to repay debt...
Not at all, they just had more currency units, but it made it easier to repay debt. The ever increasing share going to corporations versus labor is like anything else and at some point it reverses. It is reversing now. Consumer will not be better off, they just will have more currency units to repay the debt which is the net net positive since they have debt. Bondholders are the suckers, and Equity holders too. Margins have peaked last year. They will shrink from now on.
THere is no offshoring of jobs to China possible. China is feeling huge pinch, they had domestic inflation and their biggest market (Europe) had a currency going down 20% and wages going down. The ever increasing exporst of China to the West is another myth, a symetrical myth to the ever increasing share of corporations. Cyclical, as always. Chinese consumers will be hurt if China wants to save its exporters and and SOEs, China would be better off sacrifice those guys and move to a more consumer oriented econom by revaluing its currency. If China devalues the Yuan, and does more stimulus that is not good long term, the best alernative is to sacrifice the SOEs and exporters and move one to another economic model but the transition is painful.
The problem is Night that all of the direct printing and inflating has been supposedly contained to financial markets, and bankster pumping of commodities has given us vast inflation especially in food and energy which are necessities for the consumer, without wage inflation to keep up with the cost increases every extra dime that is paid for the higher necessities has to come out of consumer discretionary spending, and once consumers have cut back as much as they can on that they normally would use credit to bridge the gap, but their credit is tapped out, they are already way too deep in debt. After that all the consumer has is default, because this is not the normal wage pull or cost push inflation, this is a strictly monetary phenomenon, workers cannot demand higher wages and get them. The fed thought they could sterilize the bailouts and printing for bankers but it was inevitable that there would be leakage into the commodities and ForEx markets leading to inflation.
It will help nobody on Main Street to pay their mortgages with as you say devalued dollars if none of those dollars make it into consumers pay envelopes. In fact unless borrowers get more in wage increases than they get in inflated prices their ability to repay any debt is impaired not improved. I read that corporations are sitting on two trillion in cash, but one quarter of that is in one company, Apple, and most of the rest is in the hands of a dozen firms. They are holding it because right now it is cheaper to finance operations with near free borrowing while "investing" for higher returns than they pay to borrow, but they know that will not last forever and when rates rise they will need the money to return to normal.
In short, this monetary inflation has nothing to do with supply and demand, that is way I have been saying for years that we are in a stagflation, job market weak at best and probably in negative territory still when you strip out the accounting frauds, aggregate wages dropping on top of deep losses in household wealth, high unemployment, there is no way the workers will be getting raises.
I am on a fixed income as a disabled vet and I can tell you that last year they announced a 3.2% COLA for 2012 and that was the first raise in three years. In that period food and fuel rose by 40 and more percent. These increases are NOT temporary. In normal times the fed sees price increases as temporary because they can quickly and easily drain liquidity from Main Street lowering demand and thus having a downward impact on prices, this time they cannot control prices and while they were shooting for higher asset prices they splashed consumer necessities with the same brush. The only real deflation in the entire economy is owned housing, rents on labor, and electronics and some other consumer discretionary. By the way, rumor has it that the federal COLA this fall announced for next year if they give one at all will be in the 1.2% range, and we will only get that because it is an election year. There is NOTHING I buy that has not gone up by at least 10% since last year and a lot of what I (used to) buy is up by 100% so this small bribe to voters I think will backfire. People will be so incensed at the paltry increase they will feel compelled to vote for the other guy no matter what a dick he is. In the end I am sure that is what killed Carter, I was in the service while he was president and I voted for Raygun whom I loathed, because we had 10-12-14% inflation that they would admit to, and got 1-2% raises, we lost more than 30% of our purchasing power under Carter and simply thought we could not take another year of him, every enlisted soldier I knew with kids was on food stamps and that was when you had to be really poor to get assistance.
You have the sunk cost issue, as long as business cover their variable cost, even if they lose money on an accrual basis, they are better than stopping doing business where they do not cover ANY of their fixed capital. Capital will get destroyed, but we had inflated capital and a skinny consumer.
Yeah we get it, "RAH RAH BERNANKE". You peppered the board yesterday with your gratitude towards him.
Of course I like Bernanke forcing the price structure up, that is making debt burden easier for consumers, and that is going to fuck up hte bond holders and equity holders, and benefit over time farming, some specific mining (not iron ore which is a real estate bubble short call in China) and benefit over time Silver and Gold (right now those will stagnate because of limited additional QE, and rally when stagflation becomes apparent -later.)
There won't be a producer of anything soon. With increasing base costs and retail forcing suppliers to reduce prices, it will be impossible to make a profit producing anything.
The stock market has reached peak bullshit, just as the economy has ground to a complete halt. It's like the end of 2007 all over again.
The launch of the iFarce5 with channel stuffing of epic proportions will start the next leg down as they sit on shelves for months.
Now it is not like 2007. 2007 = 1929, today 2012 = 1937 with inflationary pressures building up. Stock market sucked until the delevaraging was complete in 1950 on corporations and consumers. Between devaluation of 1932 and 1950, commodities moved up 5 times.
It will be impossible to make a profit producing anything with the sole exception of i-anythings. There, fixed it for ya.
do you even know what channel stuffing is or are you just regurgitating what ZH writes? Apple has 120+ Billion in cash, they're doing $140B in revenue on a run rate basis with 40%+ gross margins. They invented the tablet market and do 60+% of their revenue internationally. Quibble all you want about the intricacies of the current valuation but they're making boatloads of $ and with an increasing international presence should be able to keep it going. For how long? who knows, but they're on solid ground for atleast the next 1-2 yrs. If consumers want to lever up to buy the next iphone 5, then so be it. The credit risk lies with the CC companies not Apple.
A lot of companies have been relying on ever cheaper manufacturing labor from China, so looking from that angle, the manufacturing will not come back in the US but the cheap cost might not get cheaper from now on. Actually China fixed currency regime is an abberation, i would not bet that the cost gets cheaper from now on, it worked until 2007. If China was willing to move to consumer economy it might have to sacrifice exporters and SOEs and float its currency, do not know if right now it would mean a higher FX because of flows going on, but a revaluation of the Yuan would be short term very painful but good for consumer sector of hte economy in China.
AAPL is safe...as long as the student loan program is in place.
Serfdom for life, in exchange for an i-device.
Pretty good deal, eh?
yahoo says tropical storm affected employment numbers... i still think it is global warmings fault... ducktards.
Yep, I always seem to get fired at the end of the day.
But somehow my job is there the next day and I get hired again when I show up.
AMAZING.
BLS claims 9,000 of the job cuts was Issac related. Ahem, just how stupid do they think we are? Or did they do away with the two week waiting period since the last time I filed a claim? We are to believe that there was a 9k bump in claims because of a rain storm?
Things are starting to feel so "70's".
Somebody did a photoshop of Obama as Carter yesterday. Perfect and hysterically funny. All we need is some American hostages in the Middle East and we're there!
Now if we could just get Volker to return to the Fed.
I don't know why you guys are so bearish.
Didn't you hear that "the jobs are coming"?
Obama and his stoogey mouthpieces said the country is moving in the right direction! If that isn't bullish [bullshit] I don't know what is.
On the PPI, Crude was up like 10% on the month. So that was all the fed? Had nothing to do with the hurricane speculation and Iran, right?
This will spur Fed to do something. But with low money mulitplier and velcoity, the impact is handcuffed.
http://confoundedinterest.wordpress.com/2012/09/13/prior-to-fed-announcement-jobless-claims-rise-poor-money-multiplier-and-velocity-hampers-feds-efforts/
At some point it will occur to him that all of the money he is flooding the US economy with is being held or saved or spent in the global markets - read invested in foreign economies. What happens if you load up a tennis ball throwing machine and there is no one there to hit the balls back? That is the state of velocity, or the game, today in the US.
Bring on the QE! Come on Helicopter Ben, play your last hand of "Texas Holdem"!
Take away Benny Bernanke's PhD. His thesis was all fluff and garbage. It's about time he's forced to wear a dunce and sit in the corner of the Austrian school of economics.
http://i.huffpost.com/gen/4359/thumbs/s-BIRTHDAY-BERNANKE-large.jpg
I have to be consistent and note that, on a not-seasonally adjusted basis, initial claims for last week dipped to 297,000.
Nowever, before you can say "bullish", I have to tell you: That's the first time initial UC claims came in below 300k since the week of October 6, 2007. Nearly five years ago.
NSA claims down about 31K year over year. Despite the frenzy over seasonal adjustments, it's nearly the same every week, down 30K-40K year over year.
Nonsense....CNBC said the recovery started a couple years ago
"The Fed will watch the situation and respond if necessary." ~ Uncle Fedster
The MIT billion prices inflation index has been increasing since 2009, not parabolic yet, perhaps in 2013?
Daily Online Price Index Computation: The daily online index is an average of individual price changes across multiple categories and retailers. The index uses a basket of goods that changes over time as products appear and disappear from a retailer’s webpage. It is updated on a daily basis and leveraged to estimate annual and monthly inflation. This index is not designed to forecast official inflation announcements, but to provide real-time information on major inflation trends.
http://bpp.mit.edu/usa/