More On The Incomplete Picture Presented By Initial Jobless Claims

Even with declining initial unemployment claims being trumpeted to great Comcastic fanfare as a sure sign of the end of the Apocalypse, and the Seasonally Adjusted Insured Unemployment number now down to 5.465 million, (dropping from an early August peak of 6.904 million), the one number consistently forgotten is the exhaustion transfer as more and more jobless no longer qualify for traditional 6 month unemployment insurance (being unemployed for more than half a year will do that to you). Nonetheless, combining the two data series presents a much uglier picture: adding the 3.859 on Emergency Unemployment Compensation to those on current benefits yields a total of 9.3 million who are suckling at Uncle Obama's teat! Furthermore, the series has ticked higher recently even as initial claims have continued declining. The combined number is a mere 175k off the all time high in this cumulative data series of 9.5 million recorded in late July. Additionally, at the market bottom in March the combined number was just under 7 million, meaning that as the market has rallied over 60%, the economy has lost 2.5 million workers! And don't forget that over the past 6 months an additional set of workers has rolled off the even extended EUC insurance benefits, which according to some estimates could be higher than 1 million (cumulatively) over the past 6 months. As this data is lost somewhere in the limbo of U-6, we can only extrapolate what the attached chart would look like if it captured not just those who collect the weekly $400 or so from Zimbabwe Ben, but also those who no longer are eligible.

So lest we forget and turn skeptical, jobs are a lagging indicator, and somehow not only are those 2.5 million in incremental losses since March supposed to get jobs full employment as implied by the insane 23x fw P/E, but many more incremental jobs are supposed to appear out of left field. Or so the Chairman of the Federal Reserve, and, of course, the President would have you believe.

Lastly, Mr. Jan Hatzius, whose uncanny "predictive" abilities are the stuff legends and Bloomberg columns are made of, has not changed his NFP estimate for tomorrow: -100,000. A major surprise in either direction will llikely be a market positive event: i.e., economy is improving, so dollar must be beaten with reeds, or economy is collapsing, so Bernanke will buy more MBS, ergo, dollar must once again be beaten with reeds, both leading to aggressive buying of ES on the consolidated tape by 2,600 processing cores.

h/t Mike and CreditTrader