HOLY Claims Data!: What Happened To The Obama Jobs Agenda?
August 19, 2010 10:47 am
There is bad news and then there is this week’s Initial Claims report.
FIVE HUNDRED THOUSAND – 500,000?
Notice that the Labor Department explicitly said that there are no special factors playing a part in the data this week. So, again I ask is 500,000 the last of the big jumps or is this just the beginning on our way back to a 700,000 level?
Of course the media is pursuing their silver-lining mandate by commenting on the better continuing claims. But take a look at the numbers that we are seeing. Once again, the continuing claims did move lower, but the TOTAL increase in Emergency and Extended benefits was 309,000 for the recent period. AND, even more concerning was that over the last two weeks of reported data there was an extreme increase as the extended-extension was again approved, providing for an increase of 1,648,300 to the extended-extension of the extended/emergency continuing benefits. (Do I have that right?)
So, we are to believe the recent commentary from the administration that the economy is getting stronger by the day? The cold hard facts are that there are no more jobs being created as a good deal of fear is embedded in the corporate psyche. Just look back no further than a year ago to see what happened when there was too much fat, margins were under pressure and companies were short of cash.
Now that publicly traded companies in the U.S. have loads of cash (more than we have seen in many years), there are not about to spend it on too much hiring as demand recedes. The much better use will be share buybacks, technology upgrades and looking for accretive merger/acquisition opportunities.
Oh, and by the way, the anti-business attitude the Obama Administration has taken on will not help employment either.
While we may be seeing a spike in the initial claims due to the tailing off of the Census firings, we do not expect to see a report under 400,000 in the near future.
Initial claims are piling up, indicating that businesses are continuing to cut costs. Initial claims came in at 500,000 in the August 14 week for the largest total since November. The four-week average of 482,500 is the largest since December. A month-to-month look shows significant deterioration of 25,000 for a percentage change of nearly six percent. The Labor Department said special factors are playing no part in the data.
But not all the news is negative. Continuing claims continue to come down, down 13,000 in data for the August 7 week. The four-week average of 4.527 million is the lowest of the recovery.
Today’s report points to trouble but not catastrophic trouble for the monthly employment report. Note the rise in initial claims betrays a lack of business confidence in the economic outlook. Stock futures are moving lower following the report while money is moving into the safety of Treasuries.