Stephen Roach on discouraged workers
by ilene - March 8th, 2010 4:08 pm
Stephen Roach on discouraged workers
Courtesy of Tim Iacono at The Mess That Greenspan Made
After last Friday’s print of 9.7 percent for the unemployment rate, more than a few pundits are calling the 10.1 percent jobless rate seen back in October the high for the cycle. It seems to be way too early to make that call based on the millions of "discouraged" workers who, when they start looking for work again, will suddenly count as "unemployed" again.
Stephen Roach seems to agree, figuring that the real jobless rate today is 11.5 percent.
The odds of a double-dip recession are now 40 percent? That’s good to know. There’s been a lot of talk about another downturn for the U.S. economy, but it comes as news to me that they’ve already taken the time to poll economists and that they were this pessimistic.
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CHART OF THE DAY: UNEMPLOYMENT NOW LASTS LONGER THAN BENEFITS
by ilene - October 5th, 2009 1:27 pm
CHART OF THE DAY: UNEMPLOYMENT NOW LASTS LONGER THAN BENEFITS
Courtesy of The Pragmatic Capitalist
From Bloomberg:
For the first time, the average amount of time it takes fired employees to find a new job exceeds the length of their standard unemployment benefits.
The CHART OF THE DAY shows the average duration of unemployment is now 26.2 weeks, longer than the 26 weeks of state benefits normally provided to workers who lose their jobs. It’s the first time that has occurred since the Bureau of Labor Statistics began keeping records in 1948.
The jobless rate rose to 9.8 percent in September, while payrolls fell by 263,000, a Labor Department report showed today in Washington.
Congress has extended unemployment benefits twice — first in July 2008 and then as part of the stimulus bill signed in February. Currently, the unemployed are eligible for a total of 46 weeks of benefits, and those in states where the unemployment rate is more than 6 percent are eligible for 59 weeks.
Those additional benefits expire at the end of the year, and about 1.3 million people will exhaust them by then, according to the National Employment Law Project. An extension of benefits, which was passed by the House of Representatives, is being held up in the Senate by lawmakers who object because their states would be excluded from the plan.
The purple line on the chart shows 5.4 million people have now been out of work for at least 27 weeks, representing 35.6 percent of the total number of unemployed, the most since the agency began keeping statistics in 1948.
Source: Bloomberg
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JOBLESS CLAIMS SURGE, SEARS DISAPPOINTS
by ilene - August 20th, 2009 3:05 pm
JOBLESS CLAIMS SURGE, SEARS DISAPPOINTS
Courtesy of The Pragmatic Capitalist
The market continues to fly higher in the face of bad news. This morning’s jobless claims surged unexpectedly higher to 576K – a truly remarkable figure this far into a “recovery”. Econoday reports:
Jobless claims data are a disappointment, showing increases in both initial claims and continuing claims. Initial claims for the Aug. 15 week rose 15,000 to 576,000 with the Aug. 8 week revised 3,000 higher. The result is well above expectations for 550,000. Continuing claims for the Aug. 8 week rose 2,000 to 6.241 million for a second increase in three weeks. There are no special factors skewing the data. The four-week average for initial claims rose for a third straight week and is now trailing the latest week at 570,000. The four-week average for continuing claims offers some good news, at 6.266 million for a 3,000 improvement in the week and well down from 6.548 million a month ago. The unemployment rate for insured workers, unchanged at 4.7 percent, also offers some good news. But the headline rise in initial claims is a disappointment pointing to no improvement for August payroll data. Stocks and commodities dipped in immediate reaction to the news.
In other news, Sears reported an absolutely horrible quarter. Shares are down 13% on the news. Despite $1B in cost cutting, the company still missed estimates. Revenues were down 10% year over year while same store sales at KMart and Sears both fell double digits. The consumer continues to struggle.
Naturally, the S&P 500 is tacking on 0.5% this morning….
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Whitney And CNBC
by ilene - July 13th, 2009 12:51 pm
One last thing on Meredith Whitney and the GS upgrade. For now.
Whitney And CNBC
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Is the U.S. Economy Headed for a “Jobless Recovery?”
by ilene - June 10th, 2009 1:37 pm
Is the U.S. Economy Headed for a “Jobless Recovery?”
By Don Miller
Associate Editor, Money Morning
Could the U.S. economy be looking at a "jobless recovery?"
After the worst financial crisis since the Great Depression reached its apex late last year, the U.S. economy has shown signs of life in recent months. Stock prices have soared. The housing market – once in veritable freefall – seems to be bottoming out in preparation for an eventual upsurge. And just last week, the government said that businesses cut jobs in May at the lowest rate in six months, a report that offered encouragement both to investors and to the millions of U.S. workers who have lost their jobs.
But U.S. Federal Reserve Bank Chairman Ben S. Bernanke threw cold water on hope for a full-blown economic rebound when he hinted that the U.S. labor market could well be facing a jobless recovery – an upturn in which the economy and corporate profits advance, but virtually no new jobs are created to compensate for years of layoffs.
Just this week, economists at the Federal Reserve Bank of San Francisco said they see signs that the current turnaround could mimic the aftermath of the 1990-1991 recession – a wheezy, drawn-out recovery with little hiring that means years of additional problems for U.S. workers.
"This projection indicates that the level of labor market slack would be higher by the end of 2009 than experienced at any other time in the post-World War II period,implying a longer and slower recovery path for the unemployment rate," the Fed economists wrote. "This suggests that, more than in previous recessions, when the economy rebounds, employers will tap into their existing work forces rather than hire new workers. This could substantially slow the recovery of the outflow rate and put upward pressure on future unemployment rates."
Unemployment Damage Widespread
Alongside other economic indications of a stabilizing housing market and rising consumer confidence, the unemployment figures offered a glimmer of hope that we may be on the cusp of an economic turnaround and the end of job destruction.
But it’s highly unlikely this economy will produce meaningful job creation anytime soon. The financial fallout from the biggest recession in 60 years is likely to be so costly and so pervasive that new-job creation is likely to be virtually nonexistent for years to…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.