New Unemployment Claims At 415K

The Wall Street Journal has ingenuous coverage of the latest jobless claims report:

The number of U.S. workers filing new claims for unemployment benefits dropped sharply last week, reversing the previous week's spike and confirming the gradual improvement in the jobs market. [. . .] Initial jobless claims fell 42,000 to 415,000 in the week ended Jan. 29, the Labor Department said Thursday in its weekly report. The previous week's figures, which were distorted by snow that hit four Southern states, were revised to 457,000 from 454,000.

(Emphasis supplied.) So if the higher number for the previous week was "distorted," how can we know that the employment situation is "gradually improving?" To be sure, the 415k claims number this week is bad under any circumstance. More . . .

The jobs picture simply is not improving. The Wall Street Journal claims that:

Despite swings up and down, claims have been on a gradual downward trend since August 2010. The four-week moving average of new claims, considered a more reliable indicator because it smooths out volatile data, was broadly unchanged at 430,500 in the week ending Jan. 29.

But a review of the level of jobless claims in December demonstrates that there has been virtually no change:

The job market is improving but only at a moderate pace. That's the indication from initial jobless claims which for a third time in a row held little changed, at 420,000 in the December 18 week. The four-week average ended six weeks of improvement, up 2,500 to a 426,000 level that's still about 10,000 lower than the month-ago comparison.

(Emphasis supplied.) Thus the 4 week jobless claim average on December 18, 2010 was 426,00, 4,000 LESS than the February 3, 2011 4 week jobless claim average of 430,000. That 's not gradual improvement. Indeed, it is not an improvement at all.

To be fair, there is a slight improvement from the November 2010 numbers:

Initial claims fell 34,000 in the November 20 week to a far lower-than-expected level of 407,000 (prior week revised slightly higher to 441,000). The four-week average is down 7,500 to 436,000 for a nearly 20,000 improvement in the month-ago comparison.

(Emphasis supplied.) The fact is that the "gradual improvement that was occurring between August and November 2010 has simply stalled. Since November 2010, job growth has completely stalled.

And given the new "austerity" mania, there is a very strong possibility that there will be a new down spiral as aggregate demand is likely to fall. In the meantime, even the Wall Street Journal admits that the crude U3 measure of unemployment will likely not register a decline in unemployment when released tomorrow:

Federal Reserve officials last week decided to continue buying government bonds to boost the recovery because even though the economy is improving, t's still not strong enough to significantly reduce the unemployment rate, which stood at 9.4% in December. The jobs report out Friday is expected to show the economy didn't add enough jobs to bring down the unemployment rate in January.

(Emphasis supplied.) Unless and until aggregate demand shows a continuous increase, the jobs crisis in this country will not abate. This is the simple truth. The Beltway wantas to wish this reality away, but it is not going away.

And this attitude is creating our "new normal" of near 10% unemployment. It is scandalous.

Speaking for me only

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  • Display: Sort:
    These numbers are ALWAYS lies (5.00 / 1) (#1)
    by Dadler on Thu Feb 03, 2011 at 09:26:57 AM EST
    Not worth the forked tongues they drip from.

    It is all B.S. at this point (none / 0) (#2)
    by Militarytracy on Thu Feb 03, 2011 at 09:45:47 AM EST
    I love how everything has to be revised and the revision is usually friggin huge....why is that?  Some things have to be "revised" twice before they even get close :)  But there isn't any manipulation of facts going on trying to distort the current reality, and the markets for today, and the voters for today :)

    Can anyone tell me why snow in the south (none / 0) (#3)
    by jimakaPPJ on Thu Feb 03, 2011 at 10:26:07 AM EST
    causes more claims to be filed in the week???

    When it snows here (none / 0) (#4)
    by Militarytracy on Thu Feb 03, 2011 at 10:47:19 AM EST
    Everything stops.  We don't even own snow shovels man.

    Exactly (none / 0) (#5)
    by jimakaPPJ on Thu Feb 03, 2011 at 11:02:31 AM EST
    So why did the snow cause the claims to increase in the same week???

    Doesn't make sense.


    We weren't employed (5.00 / 1) (#6)
    by Militarytracy on Thu Feb 03, 2011 at 11:04:42 AM EST
    It is all bull (none / 0) (#7)
    by Militarytracy on Thu Feb 03, 2011 at 11:07:07 AM EST
    On the investor blogs they die laughing how weather is responsible for everything now that is down or says something not desired.  It isn't the current state of the economy though okay?  Don't ever think that for one minute because we are in recovery Jim.  The weather does it all now.  Brings down Christmas shopping too even though we can't figure out why online shopping with free shipping didn't go up then.

    From the WSJ (none / 0) (#9)
    by CoralGables on Thu Feb 03, 2011 at 04:09:35 PM EST
    Still, the 2010 Christmas period finished with the strongest retail revenue growth since 2006, according to the International Council of Shopping Centers. It estimated that sales for November and December rose 3.8% compared to the year before.

    Online sales also grew 12% to $32.6 billion, according to tracking firm comScore Inc., the highest total ever, as consumers continue shifting more shopping to websites instead of physical locations.

    and this on January sales...

    In a big post-Christmas surprise, January same-store sales were stronger than many retail analysts had expected. Blizzards in the Northeast, which pummeled the area and even closed some stores, were expected to cause sour sales. Not so. On average, same-store sales rose 4.9% in January, according to retail consultancy Kantar Retail.

    Snow days are good for shopping? (none / 0) (#10)
    by oculus on Thu Feb 03, 2011 at 04:16:51 PM EST
    Apparently (none / 0) (#11)
    by CoralGables on Thu Feb 03, 2011 at 04:46:06 PM EST
    it doesn't really matter unless you are only comparing week to week. Bad weather and good weather even out over time. Now if you get a month of bad weather, then I guess it's all Amazon all the time for splendid growth.

    All that being said, retail as a whole is doing better than they anticipated.


    Well, they don't affect shopping (none / 0) (#13)
    by Militarytracy on Thu Feb 03, 2011 at 06:07:29 PM EST
    in the U.S. during Christmas yet....only the U.K., but like I said somehow online sales did not go up due to weather.  But it wasn't the economy.

    Amazon Numbers (none / 0) (#14)
    by CoralGables on Thu Feb 03, 2011 at 07:11:18 PM EST
    Net sales increased 36% to $12.95 billion in the fourth quarter of 2010, compared with $9.52 billion in fourth quarter 2009.

    A 36% increase in comparable quarters is damn impressive.


    In the U.K.? (none / 0) (#15)
    by Militarytracy on Thu Feb 03, 2011 at 08:49:07 PM EST
    our sister economies?

    Amazon (none / 0) (#16)
    by CoralGables on Thu Feb 03, 2011 at 09:15:05 PM EST
    is based in Seattle, Washington.

    For 2010, net sales increased 40% to $34.20 billion, compared with $24.51 billion in 2009. They are a global company as are many internet fueled corporations.

    They are by no means suffering loss of sales. Their 2010, their 4th quarter of 2010, and their December 2010 sales all went through the roof.


    I was talking about the U.K. (none / 0) (#17)
    by Militarytracy on Thu Feb 03, 2011 at 11:29:57 PM EST
    which is a sister euro economy, and subject to as much media propaganda at this time as our own.

    Our "sister" is on the British pound. (none / 0) (#18)
    by oculus on Thu Feb 03, 2011 at 11:38:54 PM EST
    I think (none / 0) (#19)
    by jbindc on Fri Feb 04, 2011 at 09:41:16 AM EST
    (I can't find it right now), but online shopping for the Christmas season outpaced in-store sales this year for the first time.

    That would explain the increase for Amazon.


    So if the higher number for the previous week was "distorted," how can we know that the employment situation is "gradually improving?"
    The Audacity of Hope.

    Imagine (none / 0) (#12)
    by TeresaInSnow2 on Thu Feb 03, 2011 at 04:59:53 PM EST
    Imagine when unemployment is still at 9%, wages are down because job demand is low, and people are mandated to buy MEDICAL insurance or pay a tax penalty.

    A nightmare scenario.  I would laugh if it weren't so sad.