Courtesy of Lee Adler of the Wall Street Examiner
The headline, fictional, seasonally adjusted number for initial unemployment claims came in at 291,000, which was not materially more than the Wall Street conomist crowd consensus guess of 285,000. That was a non event.
The actual, not seasonally finagled numbers, which the Wall Street-captured media ignores, shows claims continuing at all time record levels on the basis of claims per million workers. The condition has now persisted for 14 months. I have warned for months that this implied that the central bank financial engineering/credit bubble has been at a dangerous juncture. The media echo chamber continues to present record lows as positive, stubbornly ignoring the historical fact that extremes like this have always led to severe market and economic contractions. The Wall Street Journal headline today blared, “Jobless Claims Fall in Latest Sign of Improving Labor Market.”
According to the Department of Labor the actual, unmanipulated numbers were as follows. “The advance number of actual initial claims under state programs, unadjusted, totaled 285,263 in the week ending November 15, a decrease of 24,075 (or -7.8 percent) from the previous week. The seasonal factors had expected a decrease of 22,827 (or -7.4 percent) from the previous week. There were 327,053 initial claims in the comparable week in 2013. ”
Initial Claims and Annual Rate of Change- Click to enlarge
The actual week to week change last week was a decrease of around 24,000 which is a slightly less than average decline for that week of November. The average of the prior 10 years for that week was a drop of approximately 32,000. This is not a significant difference.
Actual first time claims were 12.8% lower than the same week a year ago. The normal range of the annual rate of change the past 3.5 years has mostly fluctuated between approximately -5% and -15%. During October the year to year change percentages were at extremes seen only a handful of times since the bungee rebound of 2010. This week’s number is only slightly less strong. There are no signs of material weakening yet.
New claims were 2,026 per million workers (in November nonfarm payrolls). This number is significantly lower than the ratio in the comparable November week at the top of the housing bubble in 2005 and 2006.
These numbers persisted at extreme levels at the tops of the last two bubbles for a year before the collapses got rolling. The foundations were already beginning to crumble by the time the first anniversary of record readings rolled around. The current condition has persisted for 14 months. Is this the new normal or is the bungee cord stretched further than ever before?
Initial Claims and Stock Prices- Click to enlarge
