So much for "sideways," jobless claims jump to 500k

[Timo]

Well, this increase sort of makes sense, if you stop to think about it. I mean, Republicans won the House back this month, so OF COURSE the jobless claims are going to rise! Soon, it will be just like W was back in the Big House, with new jobless claims up to a million.

[OilFinder2]

I'm close to rescinding my "sideways" prediction for initial jobless claims and making a new prediction that we'll start to see a downward trend. But I'm not going to call it a new prediction just yet. Data from mid-late November will be the tell-tale sign.

This was the week I was expecting a big drop toward 400K, and indeed, that's what came out today.

>>> U.S. jobless claims sink 34,000 to 407,000 <<<

I'm significantly closer to changing my prediction now, but I'm still going to wait. If we get at least two weeks below 400K within the next month, my prediction will be changed.

[KingM]

I'm not as pessimistic as many on the site, but don't we need to see initial claims around 300K in order to signal that job growth is recovering?

[OilFinder2]

I'm not as pessimistic as many on the site, but don't we need to see initial claims around 300K in order to signal that job growth is recovering?

Pundits and economists have cited everything from 300K to 450K. The most common numbers cited are 350K and 400K. But none of them are exactly right, because it really should be expressed in terms of a percentage of the size of the workforce, not an absolute number. Plus there are always other factors involved, so this is little more than a rule of thumb. Since we've been having some job growth with the number around 450K, it would appear that 450K is the magic number these days.

[KingM]

Yes, but the labor force expands at a certain rate through population growth, so you need to see more than positive employment numbers, you need to see numbers in excess of growth of the labor pool. I think that's where 300K sounds like a credible number.

FWIW, I think the unemployment numbers are worse than they otherwise would have been if the unemployment benefits hadn't been extended to 99 weeks. A lot of people who would have otherwise been forced into lower paying jobs are staying on unemployment as long as possible. I'm not saying they shouldn't have been extended, but this is an inevitable side effect. The net misery is probably higher, albeit spread in smaller doses to a larger number of people.

[OilFinder2]

Yes, but the labor force expands at a certain rate through population growth, so you need to see more than positive employment numbers, you need to see numbers in excess of growth of the labor pool. I think that's where 300K sounds like a credible number.

If you're talking of job creation in excess of the growth of the labor pool rather than just *any* net positive job creation #, then yes, perhaps the initial unemployment claims threshold number would be significantly lower than 450K to get a good rule-of-thumb number. However, as you can see from this chart here, the labor force has essentially ceased growing for the past 3 years or so. With the first wave of baby boomers soon to begin retirement, I would be surprised to see much labor force growth at all for the foreseeable future. So your point could be a non-issue.

FWIW, I think the unemployment numbers are worse than they otherwise would have been if the unemployment benefits hadn't been extended to 99 weeks. A lot of people who would have otherwise been forced into lower paying jobs are staying on unemployment as long as possible. I'm not saying they shouldn't have been extended, but this is an inevitable side effect. The net misery is probably higher, albeit spread in smaller doses to a larger number of people.

I actually agree with that. My hunch is that congress' recent failure to extend unemployment benefits could be a blessing in disguise. We'll find out if so by March or thereabouts.

[KingM]

I actually agree with that. My hunch is that congress' recent failure to extend unemployment benefits could be a blessing in disguise. We'll find out if so by March or thereabouts.

The next few weeks will be interesting. It could be that a big part of the ongoing slow growth is pessimism, justifiable after such a brutal recession. If we start to see initial claims in the 300s, all those companies sitting on cash may jump in, convinced that we've finally got a sustainable recovery. The economy may shortly see more robust growth.

Hard to say, though. Housing is going to be a drag for years, and there's the small problem of energy...

[Daniel_Plainview]

I'm close to rescinding my "sideways" prediction for initial jobless claims and making a new prediction that we'll start to see a downward trend. But I'm not going to call it a new prediction just yet. Data from mid-late November will be the tell-tale sign.

...I'm significantly closer to changing my prediction now, but I'm still going to wait. If we get at least two weeks below 400K within the next month, my prediction will be changed.

Weekly jobless claims soar by 26,000 to 436,000

By Jeffry Bartash
WASHINGTON (MarketWatch) - The number of workers who filed new claims for unemployment benefits rose 26,000 last week to 436,000, the U.S. Labor Department reported Thursday. Economists polled by MarketWatch had expected claims to rise to a seasonally adjusted 429,000 in the holiday-shortened week of Nov. 27. Last's week's upwardly revised reading of 410,000 was still the lowest in more than two years. The four-week average of initial claims, meanwhile, fell 5,750 to 431,000, the lowest level since August 2008. The moving average smoothes out quirks in the weekly data and is considered a more accurate gauge of employment trends. Continuing claims, which reflect workers already receiving benefits, climbed 53,000 to 4.27 million in the week ended Nov. 20. Altogether, 8.91 million people received some kind of state or federal benefit in the week of Nov. 13, up 377,000, on an unadjusted basis.

click for linkie winkie

[OilFinder2]

So far then, it's not yet time to change my prediction, though it's still encouraging to see a bit of a downtrend.
[/imitation Daniel_Plainview post]

[OilFinder2]

U.S. jobless claims fall 17,000 to 421,000
Four-week average at lowest level since August 2008

By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — The number of U.S. workers who filed new applications for unemployment benefits fell by 17,000 last week to 421,000, the Labor Department reported Thursday, resuming a recent downward trend.

Economists polled by MarketWatch had expected initial claims in the week of Dec. 4 to fall to a seasonally adjusted 425,000. Last week’s number was revised up by 2,000 to 438,000.

After peaking this year at 504,000 in August, weekly claims have gradually declined. Two weeks ago claims fell to 410,000, the lowest level in almost two-and-a-half years.

[...]

In the week of Nov. 27, the number of people who continued to receive benefits under state unemployment programs declined 191,000 to a seasonally adjusted 4.1 million. The four-week average of continuing claims fell by 64,250 to 4.23 million.

The government paid extended federal benefits to 4.51 million people, down almost 400,000 from the prior week

[...]

[/imitation Daniel_Plainview post]

[Cog]

Once we remove all the people on extended federal unemployment, we can have full employment again.

[Daniel_Plainview]

Is Karl Denninger correct that 611,944 people rolled off the rolls and now have no income?

Remember these people are in the employment report that came out last week - the household survey. Last month we went from 139,749 employed to 139,415 (both thousands) employed. These 600,000 people didn't find jobs, they are now without incomes.

[Cog]

Is Karl Denninger correct that 611,944 people rolled off the rolls and now have no income?

Technically he is correct in that extended unemployment ended for a lot of people November 30th, so they will not be counted any longer until the extensions are passed.

[OilFinder2]

As discussed in the article, this could rise back over 400K next week, but it does indicate a downward trend of late. The first month or two of next year will tell us more.

Weekly jobless claims drop below 400,000

By Ruth Mantell, MarketWatch

WASHINGTON (MarketWatch) — The number of U.S. workers filing new applications for jobless benefits fell below the key 400,000 level in the most recent weekly data, released Thursday, in a signal that the labor market is continuing to mend.

Initial claims for regular state unemployment insurance benefits fell 34,000 to a seasonally adjusted 388,000 in the week ended Dec. 25, hitting the lowest level since July of 2008, the Labor Department reported Thursday.

Economists polled by MarketWatch had expected initial claims of 413,000. The four-week average of new claims, which is smoother than the weekly data, fell 12,500 to 414,000, also reaching the lowest level since July of 2008.

Analysts also note that claims are difficult to seasonally adjust near the holidays. Without seasonal adjustment, the initial claims level rose about 25,000.

“Initial claims can be very volatile around year-end due to seasonal adjustment difficulties related to the holidays and we are cautious about reading too much into any one report,” wrote analysts at RDQ Economics in a research note.

However, RDQ added that claims have been trending lower.

“Thus, these data indicate that the labor market continued to improve and suggest that job creation picked up in December,” according to RDQ.

[...]

[KingM]

The Trend is sluggishly moving in the right direction. This chart looks good except that it's stretched over a painfully long period of time. I'm hopeful that we'll see things continue to improve.

[Armageddon]

Running out of people to lay off ? Also, it's funny how the DOL "created" 150,000 jobs. They are full of shit.

[vision-master]

The number of unemployed persons was 15.1 million in November

Among the major worker groups, the unemployment rates for adult men (10.0 per-
cent), adult women (8.4 percent), whites (8.9 percent), and Hispanics (13.2 per-
cent) edged up in November. The jobless rate for blacks (16.0 percent) showed
little change over the month, while the rate for teenagers declined to 24.6 per-
cent. The jobless rate for Asians was 7.6 percent, not seasonally adjusted.

Among the unemployed, the number of job losers and persons who completed tempor-
ary jobs rose by 390,000 to 9.5 million in November. The number of long-term un-
employed (those jobless for 27 weeks and over) was little changed at 6.3 million
and accounted for 41.9 percent of the unemployed.

http://www.bls.gov/news.release/empsit.nr0.htm

[KingM]

The number of long-term un-
employed (those jobless for 27 weeks and over) was little changed at 6.3 million
and accounted for 41.9 percent of the unemployed.

IMO, this is the worst number. The long-term jobless are going to struggle for years to come and when they do find work, past experience shows they will slide into jobs lower-tier jobs from the ones they left. Even if the economy booms in the next decade like it did in the 90s, it won't help a lot of these people.

[Serial_Worrier]

The number of long-term un-
employed (those jobless for 27 weeks and over) was little changed at 6.3 million
and accounted for 41.9 percent of the unemployed.

IMO, this is the worst number. The long-term jobless are going to struggle for years to come and when they do find work, past experience shows they will slide into jobs lower-tier jobs from the ones they left. Even if the economy booms in the next decade like it did in the 90s, it won't help a lot of these people.

Not only that but they will have to downsize from their current lavish lifestyles. They will be the new Okies. Where is the Dust Bowl when you need one?

[KingM]

Not only that but they will have to downsize from their current lavish lifestyles. They will be the new Okies. Where is the Dust Bowl when you need one?

There's no golden land of California waiting for the downtrodden of this recession.