[Sixstrings]

The rule of thumb in the economic world is that weekly initial jobless claims must be in the 300,000 range in order to get to actual job growth. We haven’t been at 300,000 since the beginning of the recession in December 2007. During the worst spell of the recession, in early 2009, the number was at 650,000. But today’s jump brings us to 500,000, a high for the year.

You can see the trajectory in this Calculated Risk graph. We’ve basically gone sideways since last year, but the last month has moved upwards. “The economy ran into a wall in August,” according to one analyst quoted in the story.
http://firedoglake.com/

Chart from Zerohedge:

http://www.zerohedge.com/article/initial-claims-500k-expectations-478k-previous-484k

500,000 is a new benchmark, in the wrong direction. I wonder, is this still within the parameters of the "sideways recovery" Oilfinder talks about?

CBO projections also out today:

WASHINGTON (Reuters) - The U.S. economy faces even more difficult times ahead with chronic high unemployment rates and slow manufacturing growth hurting the recovery, Congressional Budget Office Director Douglas Elmendorf said on Thursday.

The U.S. unemployment rate will not fall to around 5.0 percent until 2014, Elmendorf wrote in his blog about CBO's new economic and budget outlook.

Without significant changes in U.S. tax and spending laws, the U.S. government will struggle to dig its way out of a fiscal deficit hole...

(snip)

The U.S. budget deficit last year was a record $1.413 trillion, 9.9 percent of gross domestic product.
http://finance.yahoo.com/news/2010-budget-deficit-at-1342-rb-1122983085.html?x=0&.v=1

So according to the CBO, we won't get to pre-recession levels of employment until 2014! And you have to wonder how they even come to that prediction -- what the heck do they actually see getting better by 2014??? And what are the 99'ers, who are now getting cut off and facing homelessness, supposed to do for the next four years?

Oh, one more fantasy projection from the CBO.. according to them, the deficit will fall from 9.9% of GDP now to 4% in 2012.

[rockdoc123]

It has always struck me as odd that over the past 6 months or so, whenever I am visiting in the US and have the need to drive to a mall that there seems to be no parking and the shops/restaurants are full. This just did not make sense to me when you read the doom and gloom on Bloomberg each day….effectively suggesting there is no recovery and the economy is in the tank. I just plotted up something that is interesting in light of the unemployment plot….retail sales. The graph shows sales for January through June from 2002 to 2010. It is pretty obvious there is an uptick since 2009 suggesting some recovery…at least to the level of sales in mid 2007. So why the discrepancy with the jobs data? Are more and more people buying on credit, hoping for recovery and a new job? Is there more and more underground economy in motion (i.e. no official jobs but money available to spend). I certainly don’t have the answer but it makes me wonder if the economic nabobs really understand what is going on.

[Pretorian]

there is nothing to do for people. 5 % of employed Americans are feeding , heating all America. How many people each of them needs to serve their fancy? 19? I dont think so. One lettuce picker does not need 19 servants, let alone another 50-60 of their relatives, free-loading neighbours, ets.

[Pops]

YOY sales at gas stations was up 21%!

Green Shoots baby!

http://www.census.gov/retail/marts/www/ ... rrent.html

[copious.abundance]

I knew Sixstrings would bring this up.

I'm not going to explain it in detail because I doubt anyone here will believe it, but today's number - and the initial claims from the past few weeks in general - are an artifact of the seasonal adjustment process. Specifically, the fact that there were fewer than normal layoffs (and initial jobless claims) in July due to GM not furloughing so many workers during the model year changeovers, has resulted in a much-smaller-than-normal decline in not seasonally adjusted claims between the 2nd week of July and the current week. The smaller-than-normal decline in NSA numbers has resulted in a rising SA number.

I can show you the calculation if you want to see it, but as I said, I doubt anyone will believe it, or at least they will dismiss it all away. If I am right (and once you see the #'s it becomes pretty obvious), this will begin to correct itself in about a month, maybe less.

So, I will once again put my money where my mouth is: $50 says that by the last week of September, the seasonally-adjusted initial unemployment claims number will be back below 475,000. Bet goes to the first taker.

[copious.abundance]

I tried to point this out to peripato in the "US economy could recover . . ." thread a couple days ago, but I was met with the predictable denial.

It has always struck me as odd that over the past 6 months or so, whenever I am visiting in the US and have the need to drive to a mall that there seems to be no parking and the shops/restaurants are full. This just did not make sense to me when you read the doom and gloom on Bloomberg each day….effectively suggesting there is no recovery and the economy is in the tank. I just plotted up something that is interesting in light of the unemployment plot….retail sales. The graph shows sales for January through June from 2002 to 2010. It is pretty obvious there is an uptick since 2009 suggesting some recovery…at least to the level of sales in mid 2007. So why the discrepancy with the jobs data? Are more and more people buying on credit, hoping for recovery and a new job? Is there more and more underground economy in motion (i.e. no official jobs but money available to spend). I certainly don’t have the answer but it makes me wonder if the economic nabobs really understand what is going on.

[Lore]

I tried to point this out to peripato in the "US economy could recover . . ." thread a couple days ago, but I was met with the predictable denial.

It has always struck me as odd that over the past 6 months or so, whenever I am visiting in the US and have the need to drive to a mall that there seems to be no parking and the shops/restaurants are full. This just did not make sense to me when you read the doom and gloom on Bloomberg each day….effectively suggesting there is no recovery and the economy is in the tank. I just plotted up something that is interesting in light of the unemployment plot….retail sales. The graph shows sales for January through June from 2002 to 2010. It is pretty obvious there is an uptick since 2009 suggesting some recovery…at least to the level of sales in mid 2007. So why the discrepancy with the jobs data? Are more and more people buying on credit, hoping for recovery and a new job? Is there more and more underground economy in motion (i.e. no official jobs but money available to spend). I certainly don’t have the answer but it makes me wonder if the economic nabobs really understand what is going on.

You could chalk this perspective up to “ old habits die hard”, or "shop till you drop (or go broke)". Most U.S. centric companies are beating on bottom line growth not top line.

[Sixstrings]

So, I will once again put my money where my mouth is: $50 says that by the last week of September, the seasonally-adjusted initial unemployment claims number will be back below 475,000. Bet goes to the first taker.

475k, 500k.. with tens of millions out of work, and more laid off every day, your definition of Cornucopia is a distinction without a difference.

Again, I wish you'd get back to real Cornucopia. This ain't good, when even the Cornucopian vision is gloomy as hell.

[Sixstrings]

It has always struck me as odd that over the past 6 months or so, whenever I am visiting in the US and have the need to drive to a mall that there seems to be no parking and the shops/restaurants are full. This just did not make sense to me when you read the doom and gloom on Bloomberg each day….

I was watching CNBC earlier and a commentator made the point that while Sears is having trouble selling quilts for $40, at Pottery Barn they're flying off the shelves for $200. Williams Sonoma, the upscale foodie retailer, also reported strong sales today. So as wealth continues to migrate up the social strata, those living the good life continue to spend big.

It's an interesting situation.. can the economy hobble along on the strength of fewer total shoppers but more dollars spent per upscale shopper? Maybe to an extent, but just on numbers the few cannot consume as much as the many.

Also a lot of folks aren't paying a mortgage anymore, or they've walked away from their home and into a cheaper rental. I don't have the exact number handy, but the total number of households has shrunk by the millions. What that means is that households have been consolidating -- folks moving in with friends or family. Another factor here is that a lot of people are still getting those unemployment checks, so they do have some income. The "99'ers" are just beginning to fall off the rolls for good.

Spending money when one leave's the house is the North American way of life. Shopping will be the LAST thing to go.

[Sixstrings]

there is nothing to do for people. 5 % of employed Americans are feeding , heating all America.

The 5% owns most of the nation's wealth, so why complain?

[Pretorian]

there is nothing to do for people. 5 % of employed Americans are feeding , heating all America.

The 5% owns most of the nation's wealth, so why complain?

I was referring to the 5% that are actually doing the work like digging coal or harvesting produce. Doing something of value. The 5% that own their means of production are getting fed by them too , just as the other 85-90% who are shining each other's shoes and generally pretend to be busy. How many services do these 5% usually poorly paid workers( by American standards) actually need? How many hairdressers, proctologists, comedians, police officers, firemen, librarians, luxury items makers and sellers do they actually need? I bet its less than 19 service providers per person. And if its less, than what do these people supposed to do? Why are they eating anyway?

[eXpat]

YOY sales at gas stations was up 21%!

Green Shoots baby!

http://www.census.gov/retail/marts/www/ ... rrent.html

You are soooooooooooooooooooooooo last year , "Green Shoots" is not fashionable anymore between Kool-Aid drinkers ”sideways economy" is in now.

[Sixstrings]

You are soooooooooooooooooooooooo last year , "Green Shoots" is not fashionable anymore between Kool-Aid drinkers ”sideways economy" is in now.

I thought it was "recovery summer?"

[eXpat]

You are soooooooooooooooooooooooo last year , "Green Shoots" is not fashionable anymore between Kool-Aid drinkers ”sideways economy" is in now.

I thought it was "recovery summer?"

Nah, last statistics made that term outdated. First it was "Green shoots", later was "Jobless recovery", then ”"Recovery Summer" and now ”Sideways economy" is all the rage now . Brought to you by the same Wall Street fashionistas that coined the term "Creative accountancy"

[efarmer]

The American middle class was economically unsustainable, it has been an increasing problem for corporations for decades, the plan was to loan it tuition and borrowed money and morph it into a service economy on a scale unimaginable historically. It didn't work. The corporations and investors have to leave the debt incurred in the attempt in the hands of the government and take their profits and plow them in where emerging middle classes will drive their continuing profits elsewhere.
This ends up being kind of hard to spin for this government, or any government.

[Pretorian]

The American middle class was economically unsustainable

Was or is? Could you please define "middle class" , what is it in your opinion-- people that own their houses and have a certain income?

[TonyPrep]

Where did you get your data, rocdoc? And what do the lines on the chart represent?

From the census data, it looks like sales were rising in the few months up to April but have slid away since.

It has always struck me as odd that over the past 6 months or so, whenever I am visiting in the US and have the need to drive to a mall that there seems to be no parking and the shops/restaurants are full. This just did not make sense to me when you read the doom and gloom on Bloomberg each day….effectively suggesting there is no recovery and the economy is in the tank. I just plotted up something that is interesting in light of the unemployment plot….retail sales. The graph shows sales for January through June from 2002 to 2010. It is pretty obvious there is an uptick since 2009 suggesting some recovery…at least to the level of sales in mid 2007. So why the discrepancy with the jobs data? Are more and more people buying on credit, hoping for recovery and a new job? Is there more and more underground economy in motion (i.e. no official jobs but money available to spend). I certainly don’t have the answer but it makes me wonder if the economic nabobs really understand what is going on.

[rockdoc123]

Its US Census data, downloaded from that site. I had to dig around a bit to get the right spreadsheet.
Note that this is the data that is "adjusted" I'm assuming for seasonal variability. I'm on the wrong computer right now so will have to find the link later. Each of the lines represents a year through the first two quarters in order to compare to 2010.
To be honest I'm somewhat baffled by the data. I read one thing on Bloomberg and then go looking for the backup data and it seems to suggest something different. I suspect this is somehow related to the volatility out there....the market is moving on pretty much any news and not taking time to evaluate it. My broker continues to scratch his head over the whole mixed message thing going on out there.

[TonyPrep]

If you look at the press release for July, the "increase" in July (from June) was not statistically different from zero (see the footnote). The May to June figure was -0.3% (with a 0.2% margin of error, which I guess means it was definitely down but may have been only 0.1% down, but up to 0.5% down) and, from the chart, the April to May figure was -1%. So the last three months figures have not been following the trend of the previous months.

[kmann]

I have always considered 500k to be a "red flag" number. If it holds at or above that number, bad things could be in store. One explaination is that census workers are being laid off at a rate of about 30-40k per week so this number is inflated by about that much. I think by the middle of fall things will be more clear, if this is trouble coming or not.