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Thursday, June 09, 2011

If It's Thursday We Must Be Grumpy

Weekly claims came in at 427,000, and the previous week was revised up to 426,000. The chain of upward revisions continues. Four week moving average is at 424,000, and these three stats are so closely grouped that we might as well just give up and say it's trend. This now is not weather, supply shocks, etc, it's trend based on underlying economic conditions.

Initial claims are hanging in there around 425,000, which is an uncomfortable level to be sure, although not disastrous. If continued, it's likely to be associated with slowly rising unemployment rates. That's why economists kind of consider it the recession line.

This trend WILL change. It will either go lower or go higher! But it is not going to hang in at this level with consumer inflation where it is. Also, this trend isn't really stemming from government layoffs. According to JOLTS, most of the drop in state and local jobs is coming from retirements. In a lot of cases, the state/local retirement crunch is just crushing municipal budgets - which means that replacement hiring will be restrained. But the rise in claims doesn't seem to be associated with government layoffs, which means that we are shedding some jobs in the private economy.

Comments:
I've got to think TARP would have been better
spent shoring up Social Security and the pension gauranty
fund instead of paying the TBTF for cause g this mess.
Can anybody show a lasting benefit from TARP besides
a goosed stock market ? When the market crashes again,
we'll have nothing to show for it but be left with the tab.

Sporkfed
 
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