Unemployment

Latest data out of the BLS is in tune with the most recent miraculous reading of national unemployment, a number which as highlighted allows more ways to be gamed than not. In any case, for those who believe BLS data, here are the most improved states (those farmers must sure be hiring ahead of the winter season): Louisiana: from 7.4% to 6.7%, Nebraska: from 4.9% to 4.5%, Kansas: from 6.8% to 6.3%, Connecticut: 8.8% to 8.2%, and Kentucky: 11.2% to 10.6%.

Economic data adjustment/recasting/proforma expert, and the government's favorite mouthpiece (aka CNBC Senior Economic Reporter/Producer), Steve Liesman, apparently has never heard of EUC. In the clip below we were much amused as the COMCASTIC ones were trying to make yesterday's Dept of Labor data into something positive, when instead the influx of 328k into EUC programs weekly, demonstrated the complete lack of hiring and the roll of hundreds of thousands from continuing into EUCs on a weekly basis (592k in the last two weeks alone). Please see 2'40" in the attached clip.

The ABC Consumer Confidence index was just released, and is notable as it is the first confidence read since the NFP/unemployment number was released last week by the BLS. And despite all expectations, and proddings by the Comcastic ones that the presumed drop in unemployment would boost sentiment and confidence, the index in fact dropped by two points from -45 to -47. Could people just be smarter, and finally better at seeing through the BS, than the mainstream media gives them credit for?

Japan has been the poster child of what not to do. They are a textbook case for the failure of Keynesian stimulus. After 20 years of repeating the same mistakes with the same results, you would think they would learn. They haven't. Now they may enact a policy that will lead to depression level unemployment. Remember the definition of insanity: do the same thing over and over and expect a different result?

Even as the BLS and the administration are trying to cover up the real state of unemployment affairs using assorted semantic gimmicks of just what it means to be unemployed, and as companies provide adjusted EPS numbers, while actual earnings continue to collapse, the true barometer of spending, provided by the Financial Management Service, tax withholdings (net of refunds), continues to paint the truest picture of just what is really happening with both America's consumer and the corporate world. And it ain't pretty. On a rolling 12 month basis, individual tax withheld has dropped by nearly 8% YoY, from $1.42 trillion to $1.31 trillion, while company witholdings are down a whalloping 64%, from $274 billion to just under $100 billion! This is money that will never be used to pay down the skyrocketing US deficit, because both the US consumer and average US company are simply not collecting the required cash to line the Treasury's pockets with the one traditional way to pad the deficit: taxes. Expect much, much, much more debt issuance in America's short, medium and long-term future.

On the surface, the decrease in unemployment and the increase in factory orders seem encouraging. But if we dig a little deeper, the numbers tell a different story. Much of these "gains" relate to stimulus and aren't real and will dissipate once stimulus wears off.

Jan Hatzius' mea culpa, after the BLS decided to kick the the NFP consensus squarely in the shins, is lacking. Most notable the discussion about lagging wage increases: you can't have inflation when people are making less then (or the same as) they used to make in nominal terms.Where is the marginal difference coming from: why the JPMorgan Chase Gold-plated Tungsten credit card of course.

Hatzius' -100,000 is likely right, as usual, and the government will simply unrefudge all the data retroactively. Can't have the Chairman's reconfirmation be accompanied by factual economic releases. Especially not from the econometric champions at the BLS.

Even as CNBC, which seems to be unaware it is now under new ownership and can stop selling GE stock all day, every day (will Cramer be allowed to pump the worthless equities of competitor cable and satellite companies going forward? Inquiring minds want to know), could not stop praising the fabulous improvement in continuing claims which plummeted by a whopping 5,000 from 462k to 457k, one number that everyone ignored, is the explosion in Emergency Unemployment Compensation - yes, the same name for insurance benefits as they roll beyond their standard expiration horizon, and which the Administration is set on extending to cover a period from now to infinity. That number skyrocketed by 265,300 in one week to an all time record of 3,859,553 for the week ending November 14, from 3,594,253 in the prior week.

BLS data confirms that the unemployment pictures is getting worse with 29 states reporting an increase in state joblessness levels. The states with the highest levels on unemployment levels were the usual suspects: Michigan (15.1%), Nevada (13%), Rhode Island (12.9%), California (12.5%), South Carolina (12.1%) and D.C. (11.9%). The numbers continued to deteriorate in California (2.5% increase in unemployment), D.C. (4.4%), New York (1.1%), with some of the worst monthly performance noted in the traditionally better states: Wyoming (8.8%), Arkansas (7%), Mississippi (6.5%) and Alaska (6%).

The base case number one takes the view that high yield default rates are peaking and will start to drop from this level now. The rate of unemployment ranges from 10% to 11.5% with this given scenario. In the base case number two, I am using a composite of both peaks in 1991 and 2002 to suggest that default rates may carry upward one percent more. The resulting effect on unemployment targets will range from 11% to 13.5%. In our final analysis base case number three will use the peak at 13% in default rates established in 1991. Unemployment rates in this scenario show a range of 12.5% and 15% before possibly peaking.

While Bernanke is criticizing the banks one the one hand, Bernanke is patting the banks on the back with the other hand and giving them a big wink.

Contrary to what you might have heard, higher military spending leads to HIGHER unemployment and lower GDP...

In addition to PPT or other gaming of the stock market, here is another reason it can go up while jobs are crashing downward ...

The ever increasing unemployed are buying Kindles to read all about their predicament.