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Thursday, January 06, 2011

Claims and Suspense

In recent months the relationship between initial unemployment claims and overall employment as reported in the household survey has broken down, so I am not sure what the current release means. As far as I have been able to tell, the reason that the relationship broke down was because a whole lot of job losers were working in temp jobs or contract jobs which did not qualify them for unemployment when the job ended.

After having dropped below 400K last week, SA claims were up by 18K to 409K this week. What I am really waiting for in this release is the update to the insured employment base. The last update was in October of last year, when the jobs base was reported at 125,845,777 - a loss of about 900,000 jobs from the previous figure. The base reached its peak in October 2008, when it was reported at 133,902,387.

We will probably get the base update next week, and I am hoping to see a small increase.

Tomorrow we get December's employment report. That should show an increase from November of 250K or up. But the suspense builds....

Next week we will get Medicare taxes for December from Treasury. I am expecting that to improve somewhat YoY (last was a YoY drop of about 1.2%). That was a severe disappointment to me, because I had reasoned that retail hour increases should limit the number of extra jobs reported but show up in total wages. Medicare wages through February will probably tell us a lot about the economy's ability to withstand the current inflation in basics.

Tomorrow I have to take the Chief to the hospital for some cardiac testing, so I don't know when I will get to post on that employment report. It is going to snow, so it may be one heck of a day.

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