Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
The Media Silence on the Explosion in Unemployment Insurance Claims
In the week ending December 7, the advance figure for seasonally adjusted initial claims was 368,000, an increase of 68,000 from the previous week's revised figure of 300,000. The advance number of actual initial claims unadjusted, totaled 461,422 in the week ending December 7, an increase of 146,241 from the previous week. The 461,422 figure is consistent with an economic downturn.
Regular readers of this blog know that we believe the number of unemployment insurance claims filed is one of the most important indicators of economic activity and is the most up-to-date of any of the important indicators. Going into the recession of 2008-09, both the seasonally-adjusted and unadjusted figures were under 400,000 until July, 2008. They rose consistently throughout the remainder of 2008 and 2009, reaching numbers of 600,000+ in January, 2009.
If the unemployment claims numbers continue above 400,000 per week, we would consider it a harbinger of a worsening economic picture for the U.S. economy. Prof. Robert Shiller, recent Nobel prizewinner, who correctly predicted the end of the housing bubble and the ensuring 2008 recession, expressed his concern recently in an interview with Der Spiegel, of Germany, about a bubble in US stock prices that “could end badly”. "I am most worried about the boom in the U.S. stock market. Also because our economy is still weak and vulnerable," he said, describing the financial and technology sectors as overvalued.”
We are struck by the fact that this increase in unemployment claims is taking place during the peak Christmas month. We do not know that the holiday sales are weaker than retailers expected, but we expect to be told that the major source of the layoffs was in the retail industry.
And we were surprised to find no analysis in the Friday Wall St. Journal and other media which gave great coverage to the creation of 205,000 jobs in October. New unemployment claims numbered more than six times that in the same month. The number of jobs created was based on a sample while the unadjusted claims figures are actual numbers!
Real Estate Taxation
Journal of Economic Literature:
Atlantic Economic Journal: