The 405 Club

This week’s Unemployment Insurance Weekly Claims Report has been released. Initial claims fell to 470,000 while last week’s number was revised down 4,000. This wasn’t quite good enough to hit the Bloomberg consensus range of 430k to 460k. From the report:

In the week ending Jan. 23, the advance figure for seasonally adjusted initial claims was 470,000, a decrease of 8,000 from the previous week’s revised figure of 478,000. The 4-week moving average was 456,250, an increase of 9,500 from the previous week’s revised average of 446,750.

The advance seasonally adjusted insured unemployment rate was 3.5 percent for the week ending Jan. 16, a decrease of 0.1 percentage point from the prior week’s revised rate of 3.6 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Jan. 16 was 4,602,000, a decrease of 57,000 from the preceding week’s revised level of 4,659,000. The 4-week moving average was 4,669,250, a decrease of 94,250 from the preceding week’s revised average of 4,763,500.

Despite the improvement, this is being treated as not-good-enough news. I disagree a bit with that assessment. There are still huge malinvestments that need to be worked through. To really appreciate the good news, one must look at the unadjusted data. The rapid snapback to the trend from New Year’s surge is almost complete:

The advance number of actual initial claims under state programs, unadjusted, totaled 500,392 in the week ending Jan. 23, a decrease of 145,417 from the previous week. There were 620,143 initial claims in the comparable week in 2009.

The advance unadjusted insured unemployment rate was 4.3 percent during the week ending Jan. 16, a decrease of 0.2 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 5,605,729, a decrease of 185,351 from the preceding week. A year earlier, the rate was 4.3 percent and the volume was 5,715,432.

That represents a significant week-over-week and year-over-year improvement. Stability is up. Where are the new jobs? Unfortunately, December’s report disappointed and January is not likely to reverse course (more jobs losses). On the plus side, I think February’s report will show jobs expansion, at least in the unadjusted statistics. Since the unadjusted numbers correspond to actual people, we’ll accept that as genuine good news, even if the seasonally adjusted numbers are negative. The trend can take longer to reverse as long as real people are getting new jobs. I won’t shed too many tears for the trend. I will, however, shed tears for the expanded workforce that disappears from the official statistics.

This week’s good / bad lists look good for everyone but California. This is the week after the New Year’s peak.

The good list (-1000 or more): PA, NY, NC, WI, GA, SC, NJ, TX, OH, IL, VA, MO, KY, AL, MN, TN, KS, MI, IN, OR, CT, MA, WA, MD, AR, LA, CO, MS, MD, NE

The bad list (+1000 or more): WV, FL, CA

CA (the worst) was +43,748 vs PA (the best) at -25,819. All industries were represented in the good list, with weight toward manufacturing, construction, service, trade and transportation (really). California used a novel “State clearing claims backlog” excuse, which might be code for “our state is in a death spiral and with the furloughs and the decreased staffing, we’re not able to provide basic social services,” but I lost my decoder ring.

The headlines for jobs have been worse lately (with the notable exception of Ford’s expansion, which will have positive ripples), corresponding to additional cost cutting announcements from companies as they issue their quarterly reports. This should give everyone cause for concern. I think several corporations have moved beyond trimming the fat and crossed over into seppuku. I’ll check the next “mass-layoffs” report to see if there’s any story there.

-By crazynutjob.

Read all of crazynutjob’s unemployment report recaps here.