Financial

Continued Unemployment Claims Are The Highest Since November 2021

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This morning the Department of Labor released numbers.Initial Claims

  • In the week ending November 16, the advance figure for seasonally adjusted initial claims was 213,000, a decrease of 6,000 from the previous week’s revised level. The previous week’s level was revised up by 2,000 from 217,000 to 219,000.
  • The 4-week moving average was 217,750, a decrease of 3,750 from the previous week’s revised average. The previous week’s average was revised up by 500 from 221,000 to 221,500.

    • Neither Hurricane Milton nor Hurricane Helene had a lasting impact on new claims.The good news ends there.Continued Claims

  • The advance seasonally adjusted insured unemployment rate was 1.3 percent for the week ending November 9, an increase of 0.1 percentage point from the previous week’s unrevised rate.
  • The advance number for seasonally adjusted insured unemployment during the week ending November 9 was 1,908,000, an increase of 36,000 from the previous week’s revised level.
  • This is the highest level for insured unemployment since November 13, 2021 when it was 1,974,000.
  • The 4-week moving average was 1,879,250, an increase of 5,000 from the previous week’s revised average. This is the highest level for this average since November 27, 2021 when it was 1,928,000.

    • Insured UnemploymentThe key phrase above is “insured unemployment”.After someone expires all of their unemployment benefits they become “uninsured unemployment” and the Department of Labor stops tracking.Expiring Unemployment Benefits

  • Most states offer 26 weeks of unemployment benefits.
  • Many states with a maximum of 26 weeks use a sliding scale based on a worker’s earnings history to determine the maximum number of weeks they qualify
  • Arkansas, Iowa, Oklahoma, South Carolina, Missouri, North Carolina, and Kentucky have a lower number of week.
  • Massachusetts allows up to 30 weeks depending on conditions. Montana allows 28 weeks of benefits.

    • Insured unemployment generally ends at 26 weeks. To correct for expiring benefits, we need add those with expired benefits to the number of continuing claims.Continued Claims and 27+ WeeksAny incentive the Biden administration had to pad payrolls with government workers is now gone.Much of that happened at the state level and local level where illegal immigrants caused a surge in the need for health care and social workers.Change in Employment Excluding Government
    Excluding Government, Year-Over-Year Employment Is Negative 9 Straight MonthsI discussed the above chart in For all of 2023 except December, year-over-year employment excluding government was +1.8 million on the low end and +2.8 million on the high end.January of 2024 was +330,000 followed by 9 straight months of negative numbers.BLS Nonfarm RevisionsIf I am not mistaken, I believe we can spot a general trend here.And more negative revisions are coming.Quarterly QCEW Data Provides More Evidence of BLS Jobs OverstatementChart Notes

  • The Quarterly Census of Employment and Wages (QCEW) is a dataset published by the Bureau of Labor Statistics (BLS). QCEW is comprehensive, capturing 95% of US wage-and-salary jobs. The sample size is 12.2 million establishments.
  • The Current Employment Statistics (CES) Nonfarm Payroll Report comes out monthly. The sample survey is 629,000 individual establishments in 2024.
  • The Employment Level is from the monthly BLS Household Survey that also estimates the unemployment rates.

    • Yesterday, I commented 

    Hard evidence from QCEW report suggests more negative revisions coming for BLS nonfarm payroll report.

    Mish July 26, 2024: 

    At the heart of these revisions is a horribly flawed birth-death model used by the BLS. My calculation closely matches an estimate by Bloomberg’s chief Economist.

    Mish August 21, 2024: 

    Do I get to say I told you so? My advance estimate a month ago was 779,000 lower. Bloomberg estimated 730,000.

    The reports are not directly comparable, with precision, especially given the jobs vs employment discrepancy.However, my prior comparisons and advance calls suggest we see negative revisions in nonfarm payrolls from 2023 Q2 to 2024 Q2 of well over one million.My initial stab is about 1.2 million to the downside.Five-Point Recap

  • The main driver for jobs (government) is gone once Trump shuts the border.
  • Biden’s effort and incentive to pad payrolls is gone.
  • Continued claims are surging.
  • It’s much harder to find a job if you lose one.
  • Continued claims plus 27+ weeks unemployed looks very recessionary

    • Other than the above, things look great, especially if you have money in the stock market.I am not implying that uncontrolled migration is a good thing, because it isn’t.Rather, I am simply outlining what’s about to happen given the main driver for employment has been government.More By This Author:China’s Puts Export Curbs On Minerals US Needs For Weapons And Technology Quarterly QCEW Data Provides More Evidence Of BLS Jobs OverstatementMotor Vehicle Sales: How Much Is Real, How Much Is Fiction, What About EVs?

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