Thursday, April 23, 2009

Continuing Claims....

"In the week ending April 18, the advance figure for seasonally adjusted initial claims was 640,000, an increase of 27,000 from the previous week's revised figure of 613,000. The 4-week moving average was 646,750, a decrease of 4,250 from the previous week's unrevised average of 651,000. ...The advance number for seasonally adjusted insured unemployment during the week ending April 11 was 6,137,000, an increase of 93,000 from the preceding week's revised level of 6,044,000."

There are two ways to look at the data. The raw numbers are staggering -- we've not been above 6 million in continuing unemployment claims at any point in the last 40 years.

However, as many people have correctly pointed out, our country's population has grown substantially in the last 40 years. As a percentage of total employable citizens we have still seen a sizable jump (up to about 4.6%), but we are still below the peaks of 1982 (5.3%) and 1975 (almost 7%).

Unfortunately, I think it's likely to get worse before it gets better. The word that Chrysler is likely to file for Chapter 11 next week, GM's shutting factories, Microsoft cutting cap ex and other spending, etc, etc, is likely to boost anxiety about the economic prospects and probably way on the job market for some time.

The market traded within a range today, but there were many, many buyers of the market early as a result of the Apple earnings last night. Many of these buyers bought ETFs that required purchases of stock at the end of the day and thus, the market shot up 70 pts in the last few minutes of the day. Tonight Microsoft reported weak results (sales down for the first time ever), but the stock reacted positively to the news that the company would cut spending sharply. This is theoretically good for Microsoft, but it pokes holes in the "economy is rebounding" theory when a connected firm like Microsoft chooses not to spend through the recession, but is cutting back sharply.

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