Initial weekly unemployment claims for December 17, 2009
I swore off initial weekly unemployment claims because there is so much noise in the system and you can bet the DOL will revise upward the previous week to make the next one look better, trying to imply a downward trend versus absolute totals.
Due to a EP reader comment, I'm back at it so here we go.
From the DOL:
In the week ending Dec. 12, the advance figure for seasonally adjusted initial claims was 480,000, an increase of 7,000 from the previous week's revised figure of 473,000. The 4-week moving average was 467,500, a decrease of 5,250 from the previous week's revised average of 472,750.
(note the graph marks the official end to this recession)
Now, let's see how this compares to the last recession and bear in mind we have a larger labor market, higher population now.
As one can see we have initial claims around the levels at the peak of the last recession, so don't expect to get a net increase in jobs anytime soon. Also note, just to maintain 10% unemployment, the U.S. must create a minimum of 86,600 jobs per month, due to the increasing labor population.
Here are continuing claims, last update 12-05-09:
Now, here is covered unemployment, which is the number of people who qualify for state unemployment benefit, last update 11-21-09:
In other words, people falling off of the rolls, no longer being counted in the statistics.
Now the 4 week moving average of initial claims (seasonally adjusted) for this year:
Ok, you say I see a trend! You're right! BUT!
of that 4 week moving average, the last two weeks have increases.
| Dec. 12 | Dec. 5 | Nov. 28 | Nov. 21 | Nov. 14 |
| 480K | 473K | 454K | 463K | 501K |
Continuing claims has an increase of 5,000 and does not include those who moved into extensions.
So wishful thinking that somehow job creation has occurred (did they hide it under the mattress, surely if we look there we can find it!) is a very nice pipe dream.
Here's an astounding tidbit from briefing.com in trying to address why only 45,9222 workers were added to the claims number via the extensions, (which has to be a typo or wrong, extensions jumped by 144,000 to 4.73 million):
States are having difficulties getting the necessary computers and software installed and extensions cannot be paid out until the equipment is running properly. Only about half the states that receive extension monies are capable of paying out the claims.
50% of the states getting government money to help the unemployed can't even pay it out??? What???!!!! Your government in action and if this is true, where does that money go? (I know, let's do another billion dollar contract using offshore outsourced tech labor to make sure we don't get a modern computer system or database!)
Even ignoring the minimum of 86.6k jobs that must be created to maintain the status quo, it's unlikely employers hired more than fired this week and that is due to the initial claims increase.
economic absurdities
Below are the numbers posted by NDN 12/17. Clearly, given the jobs trend line and the positive correlation with initial claims, the probablity of 'jobs gain' in if not Nov. then Dec is high.
Initial claims left; monthly jobs(loss/gain) right
2009-04-01 (+648) (-519)
2009-05-01 (+630) (-303)
2009-06-01 (+617) (-463)
2009-07-01 (+567) (-304)
2009-08-01 (+571) (-154)
2009-09-01 (+564) (-139)
2009-10-01 (+532) (-111)
2009-11-01 (+513) (- 11)
2998-12-01 (+480) ????
My point in a previous note is the absurdity of economic 'measurements.' To say that we have hundreds of thousands of people initially unemployed and many thousands more continually unemployed and at the same time we have job gains is in logic a contradiction. Yet, the law of contradiction does not apply. It is ruled out of court by saying we a talking about two different surveys.
And this absurdity is not limited to employment statistics. Just recently it was reported (perhaps here on EP) that there was a conference of economist on the subject of how to measure GDP. How, for example, do imported parts of a domestically assembled product get aggregated into the GDP? No one seems to know for sure. PhDs in economics from leading universities holding high government positions say: "Whatever!"
Scientific (rational) thinking begins with precise definitions and measurements. Clearly, economics is neither a science or rational by that standard. Yet, the lives of millions of people are affected by policies which are based on this non-scientific non-rational discipline.
anonymous drive by
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Right, the BLS stats esp. have a lot of noise in it, which is why you get so much spin and can't read into just a week's worth of data too much or even a month's worth of drop in the official rates. Noise means a signal has a lot of statistical error in it. I think something like 50% of the U.S. labor force is never counted in the stats because:
1. you must be a W-2 type employee to qualify for UI
2. you must qualify for UI
3. you must not fall off of the rolls of UI
So, one must look at a lot of different data points including what's the actual # of jobs, the hours worked.
It was EP pointing out phantom GDP or stats attributing GDP to the U.S. which is really offshore outsourced goods, but this was Academic research, we just overviewed it. Ignored Academic research that is.
What's more amazing is how completely ignored offshore outsourcing is. They won't collect data on it, they won't talk about it affecting major economic indicators and they especially won't acknowledge bringing in foreign guest workers with a 10% national unemployment rate and 8 million illegals with jobs...you can bet if you mention that one you will be immediately attacked as a racist xenophobe....
;) So, that's one thing we hope EP is about, one can talk about these things, objectively, looking at the stats, data and try to get a better handle on what's happening and not get attacked simply by examining major elements of the economy &/or policy.
I also think because on this site, all of us are either working stiffs or aligned with working stiffs, we're not going to blow off the pain, suffering and misery any idiot can see if they just go for a drive around their town or stop by a food bank.
A comment on that purpose ignorance and the Fed
"What's more amazing is how completely ignored offshore outsourcing is. They won't collect data on it, they won't talk about it affecting major economic indicators and ..."
It is interesting to note that private citizens can submit study topics to the Federal Reserve and that a number of such times there have been submissions to study the effects of jobs offshoring.
Not surprisingly, the fed has turned down each and every study submission.
Also, besides those UI stats, a number of states ignore incorporating them when citing their own unemployment numbers -- they simply do those household surveys (meaning they survey those households which historically experience the least amount of unemployment!!!!!).
Now, if only the George W. Obama Administration would hire a real economist.
Thanks James
Since we're assuredly going to have much less "outrage du jour/breaking news" over the holidays, I wanted to overview some Academic research that is significant. So, if you have a list of studies on outsourcing I'd really appreciate a link, citation so I can go read them...
and even better if you are reading them, bringing to light some of the great research which hath been deemed "not politically correct" so it's buried from the public sphere, and you're willing to overview, do our EP "readers digest" on a few for us in some blog postings, I'm sure EP readers would be highly appreciative.
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