You have to love the media and it's spin on the jobless claims numbers:
In the week ending Nov. 21, the advance figure for seasonally adjusted initial claims was 466,000, a decrease of 35,000 from the previous week's revised figure of 501,000. The 4-week moving average was 496,500, a decrease of 16,500 from the previous week's revised average of 513,000.
The advance seasonally adjusted insured unemployment rate was 4.1 percent for the week ending Nov. 14, a decrease of 0.2 percentage point from the prior week's unrevised rate of 4.3 percent.
The advance number for seasonally adjusted insured unemployment during the week ending Nov. 14 was 5,423,000, a decrease of 190,000 from the preceding week's revised level of 5,613,000. The 4-week moving average was 5,613,750, a decrease of 98,500 from the preceding week's revised average of 5,712,250.
That's good, right? A decrease of 35,000 claims. The first-blush look would be "as expected, holiday hiring of temporary help."
Wait a second...
The advance number of actual initial claims under state programs, unadjusted, totaled 543,926 in the week ending Nov. 21, an increase of 68,080 from the previous week. There were 609,138 initial claims in the comparable week in 2008.
What?
So you're going to tell me that seasonal adjustments removed 100,000 claims from the raw numbers for this week, or roughly 18% of the total claims?
An 18% seasonal adjustment?!
Extended benefits are also falling off. Is this due to hiring or is this due to people simply falling off the rolls - that is, not being counted any more at all, but still jobless?
I don't know, as the weekly DOL data doesn't tell me. But the monthly data, when it is released, will - by the "NILF" number (not in labor force), which has been rising steadily, despite the alleged "improvement" in the reported firing rate.
Believe the labor market is improving if you wish - indeed, it damn well ought to be, since seasonal hiring (mostly part-time) should have been in full force last week with Black Friday due in two days. Indeed, the firing rate should have slowed a lot last week, not a little, and yet the unadjusted numbers show an increase.
We'll see what the employment situation reports for November when it is released.... as is my usual practice I'll be looking at the "Not In Labor Force" and "Total Employed" numbers from the household survey to tell me what is really going on.
I fully expect an improvement, given the usual seasonal pattern of required part-time help being hired for the holiday season.
For the sake of our economy and the so-called "green shoots" folks it damn well better be there.
GDP 3Q 2009 "Second Estimate" is out and it is 2.8%.
But let's remember - it was 3.5% on the "preliminary" report.
That's a 20% decline.
Was that an error, or was that an intentional overstatement to pump the markets and "confidence" in the original "preliminary" estimate?
Oh, and cash-for-clunkers? It was responsible for half of the so-called "advance" in the 3rd quarter (1.45%), it was a one-time deal, and it was and is just more pulled-forward demand.
Government expenses? Up 8.3%. State and local governments? They were essentially flat (down 0.1%)
The GDP report also claims that real domestic purchases were up 3.5%, but the sales tax report says otherwise.
Where did the "error" come from?
The second estimate of the third-quarter increase in real GDP is 0.7 percentage point lower, or $23.7 billion, than the advance estimate issued last month, primarily reflecting an upward revision to imports and downward revisions to personal consumption expenditures and to nonresidential fixed investment that were partly offset by an upward revision to exports.
Commercial Real Estate and actual personal spending.
Both not what they claimed.
Gee, such a shock, given the sales tax data from the states.
NOT.
PS: The claimed numbers are still, in my opinion, BS, as the sales tax numbers from the states do not support the claimed "expansion."
Here are your possibilities:
- The BEA is lying. In the third quarter they claim that PCE changed +0.2, +1.4, and -0.6% for July, August and September, respectively, leading to an aggregate change of +1.2%.
- Business that remit sales tax are lying. The overall sales tax collections in the 3rd quarter were down 8.2% from last year's levels, and this is the fourth quarter in a row that year-over-year declines were posted.
One of these two reports is a lie.
One is a count of actual monies remitted by businesses in satisfaction of taxes collected by them from real consumers processing real retail transactions (that's the spending that matters in the real economy, right?)
The other, if you read the BEA methodology papers, has the word estimate peppered liberally throughout.
Which do you believe?
Do you believe that retailers are intentionally under-reporting and under-paying sales taxes?
Or do you believe the BEA's "estimates" are complete horsecrap and that the government is intentionally overstating economic activity?
When you have two radically different claims of measurement of the same activity (in this case consumer spending) that are impossible to reconcile within reasonable "measurement error" the conclusion one is forced to reach is that one of the two reports is false.
When faced with such a conundrum it is my contention that the default position is that the purported actual count is the one you trust, and the one that contains "estimates" is presumed to be "cooked" until and unless proved otherwise.
The spinmeisters were out this morning on the trade data:
The gap grew a larger-than-anticipated 18 percent to $36.5 billion, the highest level since January, from a revised $30.8 billion in August, the Commerce Department said today in Washington. Imports surged by the most in 16 years, swamping a gain in exports.
This is being cited as "evidence" that the consumer has turned the corner - that consumption is increasing, and the economy recovering.
“Sometimes what looks bad on the surface is actually quite good and I think that’s the case this time around,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “Exports are growing strongly and imports are turning up because domestic spending has turned the corner.”
Ok, if that's true, where are the clear and obvious increases in sales tax receipts?
That data is near-real-time, it is not gamed, and it automatically (mostly) excludes food, since food sales are not taxed in most jurisdictions.
It thus correlates very well with discretionary consumer spending on goods - you know, the things that are imported?
Sal Guatieri hasn't bothered to look at those numbers, because they don't support his thesis. Yet sales tax receipts aren't just "support" for a thesis, they are in fact the final word on it, as they're not subject to government game-playing or "adjustments."
Consumer confidence came in at 66 even, much lower than expected. Big surprise? How? Were you freaking blind with the 10.2% unemployment number, and expected that consumers wouldn't be impacted by that?
Told 'ya so.
Yow.
The BLS employment report is out and it's not good.
Here's the BLS' top-line graph set:
But the internals were markedly nasty. Top-line, U-3, is now reported at 10.2%. But U-6 is 17.5%, rising dramatically from 17.0% previously (both "seasonally adjusted.")
What I really don't like however is the household survey information.
Here, once again, is my personal set of data that I use for employment situations, and again, there is no positive trend change in either. Let's start with the y/o/y trends in the "employed":
Remember, the annualized change turning positive has marked the end of recessions in the past, and turning negative has given a roughly 12 month "lead" on the initiation of a recession. It has not turned positive.
The "not in labor force" graph is even worse:
This graph continues to accelerate in a near-parabolic rise since June. In the history of the data available for this series, unfortunately only back to 1999, this has never before happened.
Our government, by choosing to protect the oligarchs and banksters instead of allowing the market to force the bad debt out into the open where it defaults has chosen to saddle our nation's citizens with unconscionable and unsustainable debt loads, both at a government and personal level. This was a critical error and, as I expected and predicted, it is now being reflected directly into the employment situation.
There is no reason for cheering in this report; you can argue over "productivity gains" all you want but without jobs the civilian population cannot buy "stuff", whether that be goods or services, and a durable economic recovery is impossible.
Buckle up folks; this ride could get a bit rough, especially with the holidays right around the corner upon which virtually all retailers depend for their continued viability.
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