Thursday, January 10, 2008
Employment And Retail
The SA and NSA insured unemployment rates are now both .2% over last year's numbers. The four-week moving average this week is 341,000, which is not statistically different than the previous. The revisions each week are now upwards, which is a further indicator of a negative trend.
These are the states with increases of more than 1,000 in initial claims for the week ending 12/29:
|IN||+1,112||Layoffs in the automobile, transportation, construction, service, and manufacturing industries.|
|VT||+1,407||Layoffs in the manufacturing industry.|
|NY||+1,461||Layoffs in the construction, service, and transportation industries.|
|NC||+1,711||Layoffs in the construction, lumber/wood, rubber/plastics, transportation equipment, textile, electrical equipment, and electronic equipment industries.|
|CT||+2,352||Layoffs in the construction and service industries.|
|OH||+5,611||Layoffs in the manufacturing industry.|
|WA||+5,840||Layoffs in the construction and manufacturing industries, and agriculture.|
|NJ||+6,859||Layoffs in the transportation, warehousing, service, public administration, and manufacturing industries.|
|PA||+14,632||Layoffs in the industrial machinery, electrical equipment, transportation, and food industries.|
|WI||+18,047||Layoffs in the construction, trade, service, transportation, warehousing, and manufacturing industries.|
|MI||+18,482||Layoffs in the automobile industry.|
Wisconsin has been having a bad time of it lately, but PA is the one I am watching the most closely. For jobs, at least, the economy is weakening across a broad spectrum of states and areas. It's kind of like grass fungus. First you get a few brown spots, and the next thing you know, the brown has taken over half your lawn.
I'll give it another few weeks, but it's getting harder and harder to believe that manufacturing employment overall will be a positive until late in 2008, which is unfortunate.
Retail sales are low enough that many of the big chains will continue to cut back on their expansion plans. Starbucks, for example, announced that it is going to slow expansion and close some stores this week. Casual dining showed weakness all last year and most of the chains are continuing that trend. So we can project with reasonable certainty that overall retail employment will be slow to negative. This will hurt commercial real estate prices, slow building, and it will also negatively impact employment.
Rising delinquencies in many auto and CC portfolios are not consistent with the belief that consumer spending will continue at the current pace. Early trends in Treasury receipts show a YoY slowing in growth of withheld income and employment taxes, and an outright drop in federal unemployment tax receipts. This is highly consistent with the other data.
So I would say that the data shows with considerable robustness that we have entered into the situation of weaknesses reinforcing weaknesses that characterizes a recession. How deep and prolonged that recession may be really depends on factors that don't originate in our economy. I'll try to collect my thoughts and organize some data and post tomorrow on that.
Well MOM, you dump that many mortgage brokers, stock salesmen, and realtors on the street at once and the employment numbers HAVE to trend down. Productivity goes up at the same time...(snark).
"Enjoy the decline of America, and BUY GOLD!"
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