... and not the pump monkey
In the week ending Sept. 4, the advance figure for seasonally adjusted initial claims was 451,000, a decrease of 27,000 from the previous week's revised figure of 478,000. The 4-week moving average was 477,750, a decrease of 9,250 from the previous week's revised average of 487,000.
Not low enough (mid-300s) for there to be net job generation. But the futures roared anyway, with the CNBS mouth-breathing crew all claiming that this was a "nice" number.
Here's where most of the excitement was likely coming from:
The problem is one that I identified nearly six months ago, which is that people don't count as "unemployed" in the claims data if they either give up or exhaust their extended benefits.
The latter is a very real problem as the "leading edge" of the unemployed are now rolling off those EUC programs each and every week, and this distorts the figures severely. Yes, this will drive some of them to seek work (gee, no more government cheese?) but not all will succeed, and those that don't now have no income from the government cheese or a job. This impact began roughly in June of this year and is now in "full roar", with the maximum roll-off coming sometime in the middle of 2011.
Yet the paradox is that the official "reports" do and will continue to show this development as economic improvement.
Like hell it is.
The other problem with these numbers is that in order to file for jobless benefits you must have had a job for a continual (and substantial) period of time - typically four quarters (one year) prior to being laid off. Therefore, "re-layoffs" don't count, and those who were marginally attached and then lose their job anew also don't count. They count in the real economy though. Further, if you lose your job, file, find a new job, and lose that one you don't count as a new claim - even though you're (again) unemployed.
Nonetheless, for all their flaws these figures are all we have on a weekly basis, and the market loved what it saw this morning, taking a hop north. We'll see if, once people have a bit of time to reflect on the roll-off from the benefit rolls, they continue to see things in as positive a light.
PS: As "Madman" on the forum pointed out....
""For the latest reporting week, nine states didn’t file claims data to the Labor Department in Washington because of the federal holiday earlier this week, a Labor Department official told reporters. As a result, California and Virginia estimated their figures and the U.S. government estimated the other seven, the official said."" from Bloomberg. FYI...................
Estimated eh? Hmmm....
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