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Unrevised New Jobless Claims Fall By 1,000

From a once again blindsided Reuters:

Jobless claims barely fall last week

June 30, 2011

WASHINGTON (Reuters) – The number of Americans filing claims for unemployment benefits barely fell last week, a government report showed on Thursday, suggesting the labor market was struggling to regain momentum.

Initial claims for state unemployment benefits slipped just 1,000 to a seasonally adjusted 428,000, the Labor Department said. Economists polled by Reuters had forecast claims dropping to 420,000. The prior week’s figure was unrevised at 429,000

So the Reuters economists were wrong?

By the way, given that these weekly claims are almost always revised upward — and usually by more than 3,000  – this probably means news claims have actually gone up. In fact, the only real news here is that last week’s number was not revised upward.

It was the 12th straight week that claims have been above 400,000, a level that is usually associated with a stable labor market…

Not that 400,000 is a particularly good number, either.

Nonfarm payrolls are expected to have increased 90,000 this month, according to a Reuters survey, with the unemployment rate edging down to 9.0 percent

In the AP’s report of today’s latest unemployment numbers we are told that "the economy needs to generate at least 125,000 jobs per month just to keep up with population growth. And at least twice that many jobs are needed to bring down the unemployment rate."

So how can this Reuters survey predict unemployment going down? No wonder they are always wrong.

The continued elevation of claims could raise concerns that the economic soft patch in the first half of the year could linger. The economy has been slammed by bad weather, high gasoline prices and supply chain disruptions after the March earthquake in Japan.

They are still trying to blame bad weather and the Japanese earthquake? Still, it is interesting to hear that high gas prices are causing unemployment. Especially when Mr. Obama and the Democrats are calling for higher taxes on oil.

However, many economists and the Federal Reserve believe activity will pick-up in the third quarter as these temporary factors ease

And when have these economists ever been wrong before?

This article was posted by Steve Gilbert on Thursday, June 30th, 2011. Comments are currently closed.

4 Responses to “Unrevised New Jobless Claims Fall By 1,000”

  1. Petronius

    June economic report :

    • The Misery Index is at a 28-year high (9.1% unemployment + 3.6% inflation = 12.7%). Unemployment is trending higher, and most jobs that are being added are temporary or part-time.

    • Mort Zuckerman wrote that unemployment is the worst since the Great Depression with 14 million people out of work. Many people have been unemployed for so long that they risk losing their skills and becoming permanently unemployable. Zuckerman notes that the official rate of 9.1% is “a gloss on the reality. These numbers do not include the millions who have stopped looking for a job or who are working part time but would work full time if a position were available. And they count only those people who have actively applied for a job within the last four weeks.” The real number is 16% when we count those who have applied for a job within the last 6 months and those 8.5 million people who are working part time but who want a full time job. The real figure would be over 16% if we counted discouraged workers who have given up. http://www.usnews.com/opinion/.....n-it-looks

    • Of the Leading Economic Indicators, six are down (average workweek, unemployment claims, consumer goods orders, vendor performance, capital goods orders, and building permits), one is stable (S&P 500), and three are positive (money supply, interest rates, and consumer expectations).

    • Here is some good news. Sweden grew its economy at an annual rate of 6.4 percent in the first quarter, following 5.7 percent growth last year. Sweden has cut income taxes four times since 2006, and may cut again in 2012. The Swedish krona is very strong.

    • The Swiss franc has shot so high that the Swiss government is complaining that it’s hurting their economy.

    • UK: Hundreds of thousands of unionized public workers went on strike over pension cuts.

    • Venezuela’s oil production has fallen once again, to levels less than half of capacity. Poor maintenance of the field is to blame since, two years ago, Hugo Chavez nationalized the oilfield services companies. The oilfields are also troubled by electric power failures and theft of pipes and cables.

    • Japan, Portugal, and Denmark are in recession.

    • The debt crisis looms in Portugal, Ireland, Italy, Greece, and Spain (PIIGS). Greece finally passed an austerity plan after Moody’s cut Greece’s sovereign rating to Caa1, which is about as low as you can go. S&P followed with a cut a few days later. There are strikes and riots in the streets of Athens. One parliamentarian was beaten by the mob. There were also street protests in Spain in response to the government’s austerity plan. Barclays and other British banks pulled tens of billions of pounds out of eurozone banks, fearing exposure to PIIGS.

    • The Eurozone drew some support from China, as China diversified its reserves away from US Treasuries to European debt.

    • US corporate profits have been good but economic growth has been spotty and lackluster; unemployment is awful, housing stinks, and consumer demand remains at low levels except for the wealthy, who are responsible for most consumer spending.

    • Housing prices have fallen 33%, compared to 31% during the Great Depression, and prices are still falling.

    • Existing home sales fell to a six-months low in May.

    • There have been 3.5M foreclosures and millions more houses are still to enter the foreclosure pipeline. There are 2M houses on the market that aren’t selling, as too much inventory still remains from the bubble created by the sub-prime mortgage program.

    • Bank of America and Goldman Sachs announced layoffs. Bank of America agreed to pay $8.5B to mortgage investors, with another $5B reserved for future claims, to settle legacy claims inherited from Countrywide’s residential mortgage-backed securities from the subprime meltdown.

    • Jon Huntsman’s company, Huntsman Corp (NYSE: HUN), employs some 12,000 people, all but 2,174 are overseas.

    • Treasury Secretary Geithner called for higher taxes.

    • Jim Grant on the regulatory environment: “The trouble is not a lack of capital. It’s a lack of capitalism. The federal apparatus has become positively asphyxiating. It is sucking the oxygen, the life, and the enterprise out of these banks.”

    • The American middle class is slowly evaporating. One out of every four Americans are underwater on their house. One out of every three have no savings. Half are unable to raise $2,000 within 30 days. Practically nobody in the American middle class is a stockholder anymore. The top 1% of Americans control over 38% of all stock wealth, and the top 10% control over 81% of all stock wealth.

    • A report by AEI says “States report that their public-employee pensions are underfunded by a total of $438 billion, but a more accurate accounting demonstrates that they are actually underfunded by over $3 trillion. The accounting methods that states currently use to measure their liabilities assumes plans can earn high investment returns without risk.” Of course the return on savings deposits is virtually nil, and bond yields are abysmal.

    • With Social Security and Medicare heading for bankruptcy, and State public pension plans underfunded, it is difficult to see how middle-class Americans expect to afford retirement.

    • Survey by AlixPartners found that 61% of Americans do not expect a return to pre-recession lifestyles until 2014, if ever. And over 10% of those surveyed said never.

    • The Wells Fargo/Gallup Investor Optimism Index fell to 33 in May, down from 42 in Feb. The top three factors hurting the investment climate were energy, the Federal budget deficit, and unemployment.

    • Sentiment toward the US dollar is very pessimistic. The dollar index is holding above 74. The dollar gained some safe haven support from the Greek debt crisis.

    • A UBS poll of central bankers showed that a majority believe the US dollar will be replaced as the world’s reserve currency within the next 25 years.

    • Joking with Jeffrey Immelt, the divine Nerobama himself admitted that The Great Stimulus of 2009 has failed (“shovel ready was not as … uh … shovel-ready as we expected”). But wasn’t it more than a failure? Wasn’t it also a tragic waste of precious resources?

    • If it was not “shovel-ready” then what was it? Another lesson in Keynesian economics? An $800 billion experiment? A crap shoot? The nation’s wealth squandered on one roll of the dice? Or a colossal transfer of wealth by one gang of robbers to their chums, who are also themselves crooks and criminals? Answer : All of the above.

    • But not to worry. The cost of The Great Stimulus will be repaid in three or four generations. It will be repaid by confiscating the property of … (drum roll, please) … “the rich.”

    • The IMF warned the US that it is “playing with fire” unless the government takes immediate steps to reduce its deficit.

    • Bernanke warned the Republicans not to use the debt ceiling to get spending reform.

    • In an 8 June interview with the WSJ, Jim Rogers said, “We’ve got to shape up and deal with the fact that we’re broke. … We have to cut spending with an ax, with a chainsaw. These are simple facts that have to be dealt with.” Rogers believes it will take a crisis before American politicians come to grips with our debt predicament. The stimulus “was absolutely the wrong thing to do. Totally the wrong thing to do.” As regards calls for more stimulus spending, Rogers replied “We can’t quadruple our debt again. We can’t print any more money. The world doesn’t have enough trees.” As regards the Dodd-Frank Banking Act and other regime regulations, Rogers called it “too much regulation” that is driving “more and more businesses going offshore. … Washington in its wisdom has driven the businesses away.”

    • Bill Gross recommended that investors get out of US Treasuries and into foreign government bonds that are more attractive on a real return basis, such as Brazil, Canada, Germany, and Mexico.

    • Former Fed chairman Alan Greenspan said he liked the Ryan plan, but that it would not pass the Senate and the president will not sign it. So — because he is so “scared” of the debt problem — as a fallback position, he recommends repealing the Bush tax cuts.

    • On the other hand, Liz Ann Sonders, Chief Investment Strategist for Schwab, says that the option of “taxation is not available to the United States as a stand-alone solution because our liabilities are too high.”

    • Former Treasury Secretary Paul O’Neill said “End the income tax and capital gains tax. Use VAT instead.”

    • Former Clinton Labor Secretary Robert Reich proposed reviving FDR’s old Work Projects Administration from the New Deal. More government is always their answer. Reich also proposes raising the tax rate to 70%.

    • Austan Goolsbee is the latest Chairman of the President’s Council of Economic Advisers to resign (they’re dropping like flies).

    • It must certainly be difficult for anyone to be an honest, principled Liberal in America these days –– after a century of failed experience in Liberal ideology, and in particular after three terrible years of Liberal damage to America.

    • The US regulatory environment is extremely negative and getting worse. EPA is pressing ahead with rules that will require electric utilities to abandon coal-fired plants at the cost of tens of billions of dollars and widespread layoffs.

    • Bonds, gold, and Swiss francs all moved higher in safe haven buying. As investors moved into bonds, interest rates moved lower. Short-term rates set new all-time lows, and 10-year rate low for the year. When Greece did not default, interest rates moved higher this week.

    • The historically low bond yields are killing retirees who depend on income from bonds.

    • The stock market retreated for seven weeks in a row, the longest slump since 2002, but rallied this week. The S&P 500 is now about where it was at the beginning of 1999.

    • A report by Standard Chartered predicted $5,000 gold, based on dwindling mine supply.

    • Physical gold remains incredibly strong, while gold stocks are undervalued. The positive fundamentals for gold are arguably the most powerful for any bull market in anything, in all of history.

    • Year-over-year consumer prices are up 3.2%, import prices up 12.5%, and commodities up 35%.

    • Kellogg’s CEO announced higher prices to offset higher commodity costs.

    • Coca-Cola and Pepsi announced price increases of 3 to 5% (in addition to price increases taken earlier this year) due to higher commodity costs.

    • Big news from Exxon Mobil — a major oil discovery in the Gulf of Mexico, the largest discovery in a decade. But will Exxon be allowed to drill?

    • Chevron announced it is sending two more floating Transocean rigs from the Gulf of Mexico to Africa as a result of slow permitting by the regime. A third Transocean rig is moving to Egypt.

    • The Exxon discovery follows the big Eagle Ford shale discovery in South Texas.

    • Followed by some bad news from the Permian Basin in West Texas-New Mexico: the oilfields here may be shut down to protect the 3-inch sand dune sagebrush lizard, if the Interior Department designates it an endangered species. One environmental study says the lizards won’t cross roads, limiting their habitat and dooming them to extinction; another study says their population is dropping because they are being killed when they cross roads. This is what passes for “science” in 21st century America.

    • A Saudi official warned US diplomats that Saudi Arabia’s oil deposits are overstated by up to 40 percent.

    • Lockheed Martin announced layoffs of 1,200 people employed in their space program.

    • Jim Rogers said that we face two serious problems — first, known reserves of oil are in steady decline, and second, the average age of the American farmer is 58, and where will that leave us in 10 more years? We have made no investment in farming or farmers.

    • As predicted, corn prices rose in June due to flooding.

    • For the first time the amount of the US corn crop going to ethanol exceeds the amount used in livestock feed.

    • On 22 June Bernanke said the economy is progressing “more slowly” than expected and he didn’t know why. The DJIA dropped 300 points in a broad sell-off.

    • Oil rose at the end of June as QE2 expired. Oil ended the month up at about $95 bbl, despite the White House decision to tap the Strategic Petroleum Reserves.

    • Release of the reserves may eventually push oil prices higher. It discourages the Saudis from stepping up production. It discourages oil companies from investing in more expensive marginal production (deepwater drilling, shale oil, tar sands). The move was made for purely political reasons to drive down gasoline prices, since there is currently no shortage of oil on world markets. At some point the reserves will have to be replenished.

  2. Right of the People

    “It must certainly be difficult for anyone to be an honest, principled Liberal in America these days –– after a century of failed experience in Liberal ideology, and in particular after three terrible years of Liberal damage to America.”

    Honest, principled liberal is an oxymoron.

    “Followed by some bad news from the Permian Basin in West Texas-New Mexico: the oilfields here may be shut down to protect the 3-inch sand dune sagebrush lizard, if the Interior Department designates it an endangered species. One environmental study says the lizards won’t cross roads, limiting their habitat and dooming them to extinction; ”

    I guess the Interior Department never heard of the Theory of Natural Selection by some dude named Darwin.

  3. tranquil.night

    Regarding Adam Smith and the Wealth of Nations, he asserted that human nature was driven towards individual self-interest, which when allowed to manifest specifically through the business process of trade is what lead to the enhancement of human lifestyles.

    This Truth has been verified all through History. Those civilizations which have thrived did not progress solely based off of intellectual superiority of their wizards or the perceived moral superiority of their State, it was when they allowed their people enough power and security to self-determination that what resulted were private markets with the actual power to effect social improvement by reducing the cost of people’s basic needs and allowing them to pursue their wants and help eachother of their own voluntary will.

    Smith also famously ranted against devaluation and undermining of monetary systems: The quantity of real metal in coins has diminished, due to the “avarice and injustice of princes and sovereign states,” enabling them to pay their debts in appearance only, and to the defraudment of creditors.

    But what do old-fuddy duddy’s from the racist era know.

  4. P. Aaron

    Obamanomics is bad…consistently.


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