So, are you buying this jobless recovery?
Posted by Ray on February 25, 2010 under Main | 
Be the First to Comment
As I had suspected, months ago, jobless claims are rising rapidly every week now. We are almost back at 500K a week for initial claims as all those temporary workers are let go from retail, that is my suspicion at least. I remember claims that once the initial claims fell below 500K we would see job creation. However, the only creation of jobs were the wonderful accounting gimmicks from the BLS as they take more and more people out of the workforce, dropping the unemployment rate and making the monthly employment report look much better than it really is.
The trend is clear now, unemployment is getting worse. Even though the initial claims data is volatile it is the best barometer to what the employment number is going to look like. Unless the government has hired far more census workers than reported I expect the employment number to look pretty bad next week. Of course, there is the ever transparent way the BLS does remove people from the roles, but most people now look for that. It is also clear that the 1M jobs the BLS were forced to add to the unemployment number in February shows that their models are broken and should be adjusted, perhaps remove the birth/death model altogether.
There is no way that the ‘backlog of filings’ is to blame as they made the claim, a couple weeks ago, that they were all caught up. The only real reason for the worsening situation is that the job market is worsening. Even the mass layoff indicator is way up again, not a good sign, which means the employment number will get much worse. The good news is that no trader believes the data coming out of Washington and, based on the confidence numbers we saw, the public is also not buying that things are better. The man on the street usually has a better grasp on how things are out there versus the ivory tower economist who does not have a clue, usually.
On the bright side durable goods orders were through the rook, until you ex-out autos or transportation altogether. However, that number really is volatile and is not indicative of any real recovery, unless you are Dennis Kneale. There has been some improving data out there, but this is a statistical recovery and nothing more. From my perspective this makes equities very overvalued.
Subscribe to Annuity IQ's FeedLS Blogs
