Weekly jobless claims are only part of employment picture for
the US. For me they help offer a "free look" into the monthly
BLS non-farm payrolls.
Since there is a two week lag in the "total claims" data, one
must combine this data with other sources to realistically gauge
the monthly BLS report. It's also important to note
that the BLS report only counts data up to the 12th of each and
every month; so whatever the surveys say for the week of the 12th
of September, those are the results that will be offered for that
month. For this reason I will usually focus on the 3rd and
4th week of each month's unemployment claims data to better
indicate rough results for that month.
For the week ending September 15th, applications for
unemployment benefits dropped by 3,000 to 382,000 (seasonally
adjusted); expectations were for only 375,000 jobs. We also
saw an upward revision of the prior week's data of 3,000 more
jobless claims, which negates last week's drop.
It doesn't take rocket science to see that jobless claims are on
the rise and have been since July on a fairly steady
Even if you smooth the data out using a 4 week average, we saw a
2,000 person continuing claim increase to 377,750.
Economist say that a number below 400,000 is enough to keep
unemployment flat; but for growth I think we should see the 4 week
average closer to 320k.
The average during the "baby recession" in the early part of the
21st century was right around 395k and we all know that markets
struggled along with the economy during that time.
As of right now there are 5.17 million people receiving state or
federal unemployment benefits in the U.S.!
I am still not sold on job health and job
There has been a dearth of job creation this year. Major
companies that have seen their stock prices rise considerably are
laying off tens of thousands of workers. Just this morning
Bank of America announced plans to cut 16,000 jobs before the end
of the year.
Jobs are at the top of the list for the Fed and were perhaps the
motivating factor behind QE3, but I don't think that current
efforts have translated to strength in the jobs space.
I will say that job creation looks better than it did back in
the early 2000's; but the problem is that trends are not stable and
corporate revenues are likely to remain stagnant or contract, which
will force companies to continue to cut costs and jobs.
Negative outlooks from barometers like UPS, FedEx, Norfolk
Southern, Cass Freight Index and more help confirm the "not so
sexy" growth scenario and may be an indicator of more cuts to
In sum, I think the unemployment claims data is neither good nor
horrible; it's just 'bleh'…which has been the overall theme for the
The question is whether QE3 and a post-election Washington can
get consumers motivated. I am still curious where the revenue
growth is going to come from.
Stalling is not flying; you can only stall for so long until you
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