This news has not received the attention it deserves. The number of persons receiving unemployment compensation insurance has dropped by 25% (2.8 million) since the high late last year, from 11.65 million to 8.82 million as of June 11th. According to the household survey of employment, we can surmise that 1.3 million of those no longer receiving compensation have found private sector jobs, while most of the remainder, for better or worse, have a stronger incentive to find a new job. I think the jobs situation continues to improve, albeit not by enough to result in a significant decline in the unemployment rate.
I'll be very interested to see the household survey tomorrow, since it has been registering a lot more jobs than the establishment survey, and that is typical in the early stages of a recovery. But whatever the numbers are, I suspect that they will be better than the market is expecting, since the market has had a very bearish bias towards everything of late.
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ReplyDeleteThe graininess of the data makes it hard to figure out the reason for the drop from 11 MM to 8 MM, the level of labor participation is an issue, as it has fallen back to its November 2009 level. Also as the long term unemployed fall of the eligibility trend.
ReplyDeleteWorse for the BLS number is the birth and Death adjustment. As a friend of mine indicated he runs a small consultancy office, and no one has ever asked him how many people he employs (its actually rising)
Although the establishment survey indeed fails to survey every business and can often be very misleading, it is adjusted after the fact (up to 2 years after the fact) using IRS data.
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