The market got a little pop this morning from the weekly jobless claims, which fell by 17,000 to 421,000 from an upwardly revised 438,000.
On an adjusted basis, mind you.
Take a look at the unadjusted numbers, the raw numbers. On an unadjusted basis, claims rose by 169,000 to 582,007 last week.
But which number do you think presents a clearer picture of where the economy is right now? You wonder why President Obama and the GOP managed to hammer out that “deal” so quickly after Friday’s bombshell jobs report, after months of posturing?
Now, I don’t want to discredit the seasonally adjusted numbers entirely; the weekly jobless claims are wildly noisy, especially at a time like now, the end of the year, when some companies are dropping the ax and others are actually doing a lot of seasonal hiring. But, as Capital Spectator points, this week’s jump was the largest “by far” since January.
The unadjusted trend in jobless claims is a wild statistical pony and therefore it’s subject to volatility levels that can make even battle-scarred statisticians dizzy. In that case, the usual caveat about ignoring any one number goes double here. By definition, the unadjusted numbers are subject to a wide range of seasonal quirks that can and do mislead us in deciphering the true trend. Nonetheless, no one needs an excuse to wonder about what could go wrong these days, and so the reversal of fortunes in unadjusted initial claims speaks for itself.
It’ll take another week or two to figure out if the unadjusted claims are just statistical noise on steroids…For the moment, we’re assuming just that…We’ll sleep better after seeing the unadjusted trend fall back to earth. But while we’re waiting, the guessing game just got a little more challenging.
The Pragmatic Capitalist picks up on a paper from the Cleveland Fed that notes the recession was “especially bad” for the jobs market. The economy has been creating only 86,000 nonfarm jobs on average so far this year, the private payrolls number is a bit higher, but both are below even what’s needed just to keep up with population growth, which is roughly 125,000 or so a month. According to the Cleveland Fed:
The recovery in payroll employment so far is relatively weak by historical standards. In previous recessionary episodes, it took almost 23 months for payroll employment to return to its pre-recession peak. The current recovery presents a stark contrast; even after 35 months, we are still 5.4 percent below the previous peak.
That, of course, isn’t to say that eventually, the jobs market will recover. But it’s taking a very long time, and in the meantime more damage is being done to not just the employed, although they are bearing the full brunt of it, but to almost every other working-class American. With such a large pool of unemployed out there, there’s no pressure on employers to raise wages, or make more part-timers into full-timers, or just restore people’s hours.
It’s not just the jobs being created (or not created for that matter,) you see, it’s the kinds of jobs.