In the week ending May 18, the advance figure for seasonally adjusted initial claims was 340,000, a decrease of 23,000 from the previous week's revised figure of 363,000. The 4-week moving average was 339,500, a decrease of 500 from the previous week's revised average of 340,000.
This is "better than expected", which of course makes it "bad news" in our odd world.
What's the big table tell us?
This is interesting; there is a real fall-off in "regular state" claims and EUC continues to wind down.
The open issue is where are those who are coming off the rolls going? Are they giving up and and running out of benefits, or are they finding jobs?
We'll see here soon, as in another couple of weeks we'll get the new NFP report in two weeks.
My "best guess" at this point is that we will not see the usual big spike in jobs that comes with the summer months; it will instead be rather muted and, while present, will not impress in terms of actual economic output.
But it likely will be enough to "justify" The Fed "tapering" -- their excuse for that which they are now being backed into a corner and must find a reason to do, whether they like it or not.
In the week ending May 11, the advance figure for seasonally adjusted initial claims was 360,000, an increase of 32,000 from the previous week's revised figure of 328,000. The 4-week moving average was 339,250, an increase of 1,250 from the previous week's revised average of 338,000.
That's not so good.....
The big table, however (which is for April 27th this week) continues to show the bleed-down in the regular state figures. It will be a couple of weeks before we pick up this spike in that table.
What is going to be particularly interesting to watch is what happens with the NFP report in June; this spike in claims coming right into the survey should have a materially negative impact on those numbers, especially if it persists into next week.
Next month's report should show a strong gain due to seasonal summer hiring, especially among young people. If it doesn't, and it looks like it won't.... oh boy.
In the week ending May 4, the advance figure for seasonally adjusted initial claims was 323,000, a decrease of 4,000 from the previous week's revised figure of 327,000. The 4-week moving average was 336,750, a decrease of 6,250 from the previous week's revised average of 343,000.
Uh huh. Unadjusted was actually under 300k though, so perhaps this is "real". Who knows.
Let's look at the big table and see what, if anything, it tells us:
Well now, that's interesting. We're getting close to 3 million in regular state levels. But note that this is "only" down ~250,000 from a year ago, which belies the reality -- the roll-off is all coming from EUC, which is ending.
The problem is that there's no material improvement in the employment population ratio -- so there you are. While the labor situation isn't deteriorating it's also not getting materially better.
Total nonfarm payroll employment rose by 165,000 in April, and the unemployment rate was little changed at 7.5 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, food services and drinking places, retail trade, and health care.
There were huge revisions (positive) in last month's report and the combination drove the market higher, as both were "much better than expected." Is this justified?
That's an actual uptick -- albeit right on schedule (spring hiring.) I can't find a problem there, and on-schedule we also have an uptick in the employment rate as well:
As for how screwed we are we are still bouncing around under population requirements, so while this report is "good", it's not strong.
Now for the bad news.
The average workweek for all employees on private nonfarm payrolls decreased by 0.2 hour in April to 34.4 hours. Within manufacturing, the workweek decreased by 0.1 hour to 40.7 hours, and overtime declined by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.7 hours. (See tables B-2 and B-7.)
This is a problem. If we look at the "employed" figure of 143,724,000 people a drop of 0.2 hours is a full-time-equivalent decrease of 1/2%. Applied to the employed population this amounts to an imputed economic decrease of 718,620 jobs!
That is, the loss of work-week hours of just 0.2 is the same economic impact as firing 700,000 people!
There is a huge problem coming this year and into next in this regard as the trend of cutting hours back to get under Obamacare limits is picking up steam and will continue.
Do not underestimate the economic impact of those hours-worked changes -- you'd have to post up a +700k jobs figure to offset just this one month's change in hourly workweek!
You'll be told this is a "good report" and it is, on the surface. But I bet not one of the talking heads on CNBC runs the math on what the workweek means in terms of economic impact.
You heard it here first, and later this summer and into the fall when the jobs report continues to post up mid-100k numbers but consumer spending collapses into the toilet at a rate that is roughly identical to when we're losing 600-700,000 jobs a month and people are scratching their heads trying to figure out why it's happening as the stock market crashes, you will be one of the few who understands what has happened and why.
In the week ending April 27, the advance figure for seasonally adjusted initial claims was 324,000, a decrease of 18,000 from the previous week's revised figure of 342,000. The 4-week moving average was 342,250, a decrease of 16,000 from the previous week's revised average of 358,250.
Down from the expected number, and slightly good for the market. The "bigger news" was the ECB cutting rates, of course.
Let's look at the big table:
The drop in "regular state" is material; this is also close to survey week. This is a contrary indicator against the ADP figures, and forces an upward revision of 25k in my guess for tomorrow.
Therefore, my "best estimate" for tomorrow is +125k on the NFP with the usual +/- 50k.
