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Thursday, November 30, 2006

Time To Start Watching The Unemployment Numbers

The seasonally adjusted four-week moving average for unemployment claims is up to 325,000. From the DOL release:
State/Change/State Supplied Comment
IA/+1,027/No comment.
LA/+1,040/No comment.
NC/+1,143/Layoffs in the construction, lumber/wood, furniture, fabricated metals, and transportation industries.
MD/+1,201/No comment.
AZ/+1,351/No comment.
CT/+1,548/Layoffs in the construction industry, and agriculture.
WI/+1,623/Layoffs in the construction, service, and manufacturing industries.
MN/+2,126/Layoffs in the construction industry.
MO/+2,175/Layoffs in the construction and trade industries.
WA/+2,188/No comment.
TX/+2,200/Layoffs in the utilities and manufacturing industries.
KY/+2,437/Layoffs in the automobile and manufacturing industries.
OR/+2,484/No comment.
AR/+2,668/No comment.
FL/+3,020/Layoffs in the construction, trade, service, and manufacturing industries, and agriculture.
OH/+3,091/Layoffs in the construction industry.
IN/+3,263/Layoffs in the automobile industry.
MI/+3,296/Layoffs in the construction industry.
NJ/+3,816/Layoffs in the construction, trade, service, and manufacturing industries.
PA/+8,925/Layoffs in the construction, trade, and service industries.
IL/+9,309/Layoffs in the construction, trade, service, and manufacturing industries.
CA/+9,949/Layoffs in the construction and service industries, and agriculture.

South Carolina and Mississippi had small decreases in initial claims.

Late in the year you generally see a rise in unemployment claims, so the seasonally adjusted (SA) numbers are the relevant figures. You also expect declining construction employment in the winter, but the difference this year is that the decline in permits means that many of these jobs won't be back in the spring.

These figures look as if they may be moving out of the 2004/2005 range in the next few weeks. You can pull the initial unemployment claims for each week since 1967 at this page.

The more blue collar construction guys who are laid off the better the Fed suits feel. It is insanity to fight inflation with only a single tool. We could restrict graduation rates from college thus putting PhD profs out on the street; we could simply restrict the money supply which accomplishes the same thing as a rate rise but causes less damage to the blue collar economy. Spurring business investment won't be tried because it might make three people wealthy. Watching unemployment isn't all that important because our underground economy is huge and unmeasured. There are at least 25 million Americans working "off the books" and God knows how many businesses feed this great white whale. The Democrats swore they'd raise taxes and now they are cutting them, which is a stimulant, they swore they'd stop the Iraq war but now they want to shut down our own missile defense systems. I only point this out to demonstrate why it is folly to predict the economy past the next few months.
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