For most of this year, the weekly unemployment claims have been jerked around by seasonal adjustment factors that didn't quite match the typical seasonal variations that occur. As a result, claims were under-reported in late February and March, and over-reported in April. I've been blogging about this for a long time. Now I think this little sideshow is finally coming to an end.
The top chart shows the seasonally-adjusted data, while the bottom chart shows the actual data. Note that in actual data claims have been relatively low and flat since February, with a modest spike in July (which is typical in July because auto manufacturers usually lay off workers as they retool their assembly lines). In the adjusted data, there is a huge spike in April which does not show up at all in the raw data. This was largely the result of earlier-than-expected auto layoffs. The seasonal factors expected the actual data to be weak in April, but instead it was higher than usual, so that turned into a large rise in the adjusted data.
In any event, the predictable seasonal events are now in the past, and we won't have another until later this year when workers hired to prepare for the Christmas season start getting laid off. What's happened so far this year is that all the confusion created as a result of volatile claims numbers has been much ado about almost nothing. Despite the headlines, claims have been fairly stable for most of the year; the economy is neither accelerating nor decelerating. It's steady (and slow) as she goes, although I think there is reason to expect activity to pick up somewhat in the months to come.
These numbers were surprisingly good. The 52 week moving average
ReplyDeleteof non seasonally adjusted jobless
claims continues to move southward.
California and Florida's 52 week M.A. for NSA claims continued to move southwards also. Interestingly
Minnesota still showed residual
effect from the shutdown and Alabama has yet to recover from the
effects of the Tornadoes....
Too slow. This economy needs some geritol.
ReplyDeleteI don;t know why all the feebleness at the Fed. The Bank of Japan has proved that going to zero bound and staying there accomplishes nothing, except perma-gloom.
Time change, upending hoary traditions and maxims. In the past, tight money made sense.
Now, it no longer does. The Fed needs to do more QE. If they retire the debt or not is inconsequential, as they kick back interest payments to the Treasury anyway.
Yes, this seems like having your cake and eating it too. Like a diet where you eat more and lose weight.
In fact, QE offers a way to cut our debt, and spur growth.
Inflation? Tell me when you see any. Tell me when unit labor costs start increasing at more than 3 percent a year (for three years, unit labor costs have been falling).
The USA imports services, capital, goods, and labor. We are inoculated against inflation. The unions have been crushed. Innovation is rife. Where is the inflation?
On top of that, we need a long slug of moderate inflation anyway, to help us deleverage.
Krugman, who is not always wrong, is blogging about Euro-gloom, and a depression in the defaulting nations of Greece, et al. They cannot print money, as they are tied to the euro.
ReplyDeleteAs of now, the only locomotives in the world are BRIC nations. Let's hope they keep up their monetary stimulus.
The world needs locomotives--and Europe and the USA are stuck in idle, or nearly. This is not promising.
Good post on how we got to $14.9T. Despite the rhetoric, Obama added 1/3 what little Bush tallied up.
ReplyDeletehttp://www.nytimes.com/interactive/2011/07/28/us/charting-the-american-debt-crisis.html?src=ISMR_AP_LO_MST_FB
The combined Bush family added $7.6T to our national debt. Solid Republican effort right there...
Actually, the problem is the obligations we have taken on as a country. I did a quick look at the past 80 years and only three times did one party have a filibuster proof majority in the Senate, a large majority in the house and the presidency at the same time: the mid-late 30's; the mid-60's, and 2009-10. All of those were Democratic Party "GOVERNMENTS" as opposed to administrations. Republicans have never had a GOVERNMENT during that period. In each of those periods, and only those periods, did we get ponzi scheme entitlement programs (SS, Medicare/aid; Food Stamps;ObamaCare; etc.) and vast subsidies of otherwise unviable industries (lesser-credit housing, universal "education"). These are the obligations that are sinking the country in an era of rising non-productive demographics. The only solution is to finally get a Republican GOVERNMENT to slow the increase.
ReplyDeletePublic: Something's very wrong with the NY Times' data. To begin with, our total debt owed to the public (which is the only measure that counts) is $9.7 trillion, not 14.3 trillion. Second, total revenues under Bush II were $17.2 trillion, and total spending was $19.7 trillion, for a deficit of $2.5 trillion. How they can claim that Bush racked up a deficit of $6.1 is beyond belief.
ReplyDeleteFor that matter, I calculate that through June of this year, Obama's revenues are $5.2 trillion, spending $8.5 trillion, for a $3.3 trillion deficit. That's one third more than Bush in one third the time.