Jobless Claims Look Partly Cloudy Obama

Weekly Jobless Claims were reported today, and the sky looked sunny, but your friendly neighborhood weatherman sees a partly cloudy forecast, with a chance for rain on the revision. That said, seasonal patterns (read cyclical) could have the sun back out tomorrow, and we suspect many of you will invest in those sunny labor days ahead. Still, those sunny days could come too late for Democrat incumbents.

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Jobless Claims

Weekly Jobless Claims figures marched upward to 500K this summer, and terrified investors and policy makers in the process. The declared impotence of the Democrats and President Obama in reviving the economy is the loudest rallying cry of Republicans heading into the November elections. The president has been set forth by his party into the fray to save the political race, and has spent much of the last few weeks reassuring about past efforts, and perhaps haphazardly introducing new measures to put Americans back to work.

The president has also been sure to point out that the Republicans have not offered much in the form of ideas of their own, and he warns voters not to return to the past. Whether the Republicans could have done better is a viable argument too, given that the economic pillars of America collapsed during President Bush’s rein. Thus, the red argument is met by deaf ears, and instead voters march into November with hatchets handy to unseat incumbents of all sorts.

The latest weekly claim figures showed a decrease to 451K in the week ended September 4, down 27K from the prior week's revised figure of 478K (478K the week before that too). The four-week moving average also gave way, dropping 9,250, to 477,750. Insured unemployment was unchanged at 3.5% for the August 28 period supplied, so continuing unemployment hangs heavy.

Despite the drop, a weekly shed of 450K+ is nothing to write home about. Besides, the low result could still be far off reality. California and Virginia mailed in estimates of new claims this week, due to the Labor Day holiday. Another seven states had their figures fudged by the federal government, and we know how good the feds are at taking a tally. So, there could be a major revision to this figure next week. Still, if not properly adjusted for seasonal patterns, I would think the chances for a downward revision are not bad either, given the fact that the holiday probably had folks going to the beach instead of waiting in line downtown. Heck, I know one benefits recipient who is in Italy right now!

Claims of 450K plus characterize a stagnant labor market. This is about the same rate of new filers that has existed all year long, so firms are neither firing nor hiring. Meanwhile, a growing number of students are graduating into the labor force. In this kind of environment, unemployment should rise from the August reported 9.6%. Still, for the cheery among you who always find the glass half fool (err full), then you’ll like the fact that this week’s claims matched against the much higher 556K reported last year at this time. But, hold on a second… that’s only a hundred thousand more.

We suspect you missed our reporting on the Employment Situation Report for August last week, and so we want to make up for it here with our tally of Under-Employment. Our figure includes part-timers who once worked full-time, in the count. This adjustment also adds back "discouraged" and marginally attached workers, who are not counted as part of the workforce or unemployed. If we add back the 2.37 million displaced workers to the labor market, and include the 8.86 million underemployed part-timers in the unemployed count, adjusted unemployment reaches ((14.860M + 2.370M + 8.860M) / (154.110M + 2.370M)) * 100 = 16.7%. That's greater than the 16.5% recorded in July, and compares to 16.5% in June; 16.6% in May; 17.1% in April; 16.9% in March; 16.8% in February; and 16.4% in January.

The study of this metric's trend line can only lead to concern. We noted also that the marginally attached count dropped, which could be due to folks again disappearing from the workforce (not a good thing). Also, part-timers increased in both sub-categories, including workers who found their hours cut and those who could only find part-time work. These are both symptoms of a sick labor market.

That said, if jobless claims can break lower than this, we might have a better state of affairs finally developing in the job market. Don’t get your hopes up, but an improvement from here, even of the slightest proportions, would be embraced by the stock market. It may not reflect a substantial gain for the economy, but stocks should still be thrilled.

FYI:

The highest insured unemployment rates in the week ending Aug. 21 were in Puerto Rico (5.9 percent), New Jersey (4.6), Pennsylvania (4.6), Oregon (4.5), California (4.4), Connecticut (4.3), Alaska (4.1), Nevada (4.1), Rhode Island (4.0), and Wisconsin (3.9).

The largest increases in initial claims for the week ending Aug. 28 were in New York (+4,891), Florida (+1,886), Nevada (+1,052), Oregon (+828), and Texas (+742), while the largest decreases were in California (-4,127), Illinois (-2,114), Iowa (-813), Michigan (-599), and Maryland (-550).

For you lucky folks who qualify, extended benefits were available in Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, and Wisconsin during the week ending Aug. 21.



Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), SFN Group (NYSE: SFN), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.OB), Purespectrum (OTC: PSRU.OB) and Corporate Resource Services (OTC: CRRS.OB).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.