Initial claims for unemployment are below bubble record levels
after first reaching that extreme in September of last year. The
warning signs of a distorted, maladjusted, overheated economy
The headline number is seasonally adjusted, therefore fictional.
It may or may not give an accurate impression of reality, depending
on the week. The recent seasonally adjusted numbers, and the way
the mainstream media reports the numbers, give little indication
that by historical standards the numbers of firings and layoffs
that lead to unemployment claims represent a danger sign. No one is
ringing alarm bells. Bulls view this condition as a sign that the
economy has reached "escape velocity." Bears suggest that this is"
as good as it gets." I think it's even more ominous.
It's standard practice in the media for mainstream pundits to be
looking the wrong way, but until the last couple of weeks I hadn't
even seen any independent bloggers raise this issue either. Now
some observers have come up with the term "as good as it gets."
They're catching up to reality, but are still behind the curve. In
my view, the economy reached that level last fall. Perhaps a year
or two from now they will look back and say, "The economy was
overheated, but nobody saw it," except for those of us who pay
attention to the
data, as opposed to the seasonally adjusted diversion that everyone
is fixated on.
According to the
Department of Labor
, "The advance number of actual initial claims under state
programs, unadjusted, totaled 369,591 in the week ending July 12,
an increase of 47,079 (or 14.6 percent) from the previous week. The
seasonal factors had expected an increase of 49,945 (or 15.5
percent) from the previous week. There were 410,974 initial claims
in the comparable week in 2013."
Actual initial unemployment claims were 10% lower than the same
week a year ago. The normal range of the annual rate of change the
past 3.5 years has mostly fluctuated between -5% and -15%. The
current number is just a continuation of the bubble trend.
The actual week to week change last week was an increase of
47,000. Increases are normal for this week of July. The current
number is consistent with the average change for this week.
New claims were 2,644 per million workers (based on June nonfarm
payrolls). This compares with 2,759 per million in this week of
2007 and 2,768 per million in the comparable week of 2006, at the
very top of the housing bubble. In September 2013, this figure set
a record low. In each ensuing week the numbers have remained at or
near record levels.
A soft economy with high unemployment, but where hardly any
workers are laid off each week suggests that employers are holding
on to the workers they have with the skill sets they need because
they cannot find those skills in the enormous pool of unemployed
workers. The labor market of those with needed skills is tight. The
recent surge in job openings shown by Janet Yellen's favorite
the JOLTS Survey (Job Openings and Labor Turnover),
supports that view
The Wall Street Examiner
keeps track of the machinations of the Fed, Primary Dealers, the US
Treasury, other central banks and a whole cast of market actors as
they drive the markets.
Finally Waking Up To The Downside Of Debt