Wall Street Greek: Weekly Jobs Report Implies Improvement

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The weekly jobs report showed a stalled pace of job losses, though still a sad one. The market found uplifting news in the insured unemployment rate, which showed the level of continuing claims filers eased to 5.0%, from 5.1%. However, your old pal "Greek" finds a snake in the grass.

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Weekly Jobs Report

In the week ending June 13, weekly initial jobless claims amounted to 608K, versus the economists' consensus expectation for 610K. The figure compared against a prior week revised total of 605K. The four-week moving average eased by 7,000, to 615,750.

Now what matters...

The level of continuing claims filers improved to 5.0%, from 5.1%. Some 148K fewer folks claimed unemployment last week. Now before you run to your window and yell "the war is over," keep in mind that this data only tells us that fewer sorry souls entered the system than left it last week. Let's ponder how one leaves the system...

You are left off the unemployment line when you get a full-time or part-time job, OR when your benefits run out. Aha! That tricky Greek uncovered another snake in the grass. Popular press is advising the world today that people are getting jobs, when in fact it is more likely they are just not collecting checks any longer... and that's a bad thing.

As you collect unemployment (speaking from experience) you enjoy a sense of at-ease initially. This is likely similar to how you might feel as a lifeguard reaches you while at the will of the currents. Imagine how you feel though, when you realize both you and the lifeguard are surrounded by sharks.

"While there is a check coming in, the world is a wonderful place. You enjoy your days off, arising long after the sun and watching the fools on the cobblestone below rushing off to their cubicle prison cells."

While there is a check coming in, the world is a wonderful place. You enjoy your days off, arising long after the sun and watching the fools on the cobblestone below rushing off to their cubicle prison cells. You might even jeer at them, "Ha, fools, run! Hurry! Don't be late!" You enjoy the luxury of the movie matinee', something most of us consider an urban legend. You ponder the questions of life over hours long coffee breaks... Perhaps you plan and take that trip you've been long dreaming of... And after some time, you even send off a resume or two.

Then, maybe about halfway through your entitled benefits, reality hits! What if I don't get another job right away! I suspect many of us go through this initially, before enjoying the long days, and then return to the anxiety filled nights. Imagine what happens when the benefits run out; how spending habits might be affected...

We suspect this improvement reported today in continuing claims is dangerously misleading, though it should be obvious since employment is a lagging indicator. Eventually, this figure should improve and mean something, but we posit it's a bit too early for that yet. Last month's Employment Situation Report showed a rising jobless count, and while announced corporate layoffs declined, they remained significant.

More report details...

The highest insured unemployment rates in the week ending May 30 were in Michigan (7.5 percent), Oregon (7.0), Nevada (6.3), Puerto Rico (6.3), Pennsylvania (6.2), Wisconsin (6.0), Arkansas (5.6), South Carolina (5.5), California (5.4), and North Carolina (5.4).

The largest increases in initial claims for the week ending June 6 were in Pennsylvania (+6,861), Florida (+6,469), Ohio (+5,104), California (+4,894), and New York (+4,795), while the largest decreases were in Arkansas (-1,206), Puerto Rico (-1,131), Wisconsin (-707), Arizona (-693), and Nebraska (-450).