As I mentioned last week, the unexpected rise in weekly unemployment claims that rattled the market could have been due to the vagaries of seasonal adjustment. This week's unexpected fall in claims suggests that I was correct.
The top chart shows seasonally adjusted claims, while the bottom shows actual claims. Actual claims have fallen the past two weeks, and now the seasonally adjusted claims number is catching up. What happened last week was that actual claims did not fall as much as the seasonals expected, probably because they didn't rise as much as expected in July. Note also that the actual claims number has hit a new low for the year, and the continuing claims number has been trending down since peaking in June of last year.
By next week, we'll probably see the adjusted number fall a bit further, to show that claims are about where they've been on average since January. In short, all the hoopla over claims has been an exercise in futility, because there has been no real change in the underlying fundamentals of the labor market so far this year. The much-anticipated double-dip recession is still a no-show in the data.
back to what would be the highest level in a decade outside of the outsized spike in the freefall of '08-'09
ReplyDeletehttp://tinyurl.com/2fez3tl
joy...
We should hit a low sometime in September with regard to NSA claims numbers then pickup gradually
ReplyDeletethrough the end of the year....BLS
has the low on September 11th but
if they could easily be off...seasonal facot wise...
Along with the unemployment claims pessimism raking the comment columns (not so much here, but over on SA) is the constant negative drumbeat on housing. A good interpretation of the consensus is that housing construction will not return in any size for the remainder of the decade.
ReplyDeleteI have just finished listening to the a recording of the Toll Bros (TOL) conference call. Bob Toll has a fair record of being a straight shooter...back in '08 he clearly said things were bad and getting worse. While he does look for silver linings he is no polyanna. He is an old head in a tough, cyclical business and he is has been very successful. His thoughts and opinions are worth a listen.
http:biz.yahoo.com/cc/9/116429.html
For the macro only readers who ignore all things micro, don't bother with this. For those of you who would appreciate a look into a top notch homebuilder who get their hands dirty every day in the real world of housing, there might be a few interesting facts to ponder.
Scott,
ReplyDeleteCongrats to you (and Brodero) for picking up on the statistical anomoly on the claims number.
We get the GDP number tomorrow. I don't think there is a market participant alive who thinks over 1.5% is even possible. A 1% number is probably baked in the cake. Below 1% might be a small problem, depending on how far below it is. I would be interested in Scott and Brodero's take on how big the import drag is on the number. If its a big factor, it might not be so negative, no?
Q2 is old news, so I doubt there will be much reaction to the number. But if it is revised down I will be interested to see if the deflator is revised up.
ReplyDeleteJohn...I think a lot of amateur
ReplyDeleteeco nerds (Myself included) are going to eagerly watch the import
drag....I know Merrill Lynch
expects a 1.5% with net exports
causing a drag of 3.2% on the GDP
numbers...they do not expect net
exports to be drag in the next quarter....
Bro,
ReplyDeleteI take it that you think the trade deficit improves in the current quarter? In other words the increase in imports seen last quarter will not be sustained and thus not be the GDP drag it is likely to be in Q2?
I do not the increase in consumer
ReplyDeletegoods imports being repeated in the third quarter...however residential,structures and state and
local will be a drag this quarter....