MarketWatch is reporting Initial jobless claims highest since mid-April.
First-time claims for state unemployment benefits crept up in the latest week, hitting a high last seen in mid-April and signaling some weakening in the nation's labor market.Unemployment has Bottomed
Including a revision to the prior week's claims data, initial claims have now risen for five straight weeks, according to a report from the Labor Department issued Thursday.
Claims for the week ended Aug. 25 rose by 9,000 to 334,000, the highest since April 14. Meanwhile, the four-week average of those claims climbed by 6,250. At 324,500, it was the highest reading since April 28.
The four-week average smoothes out distortions in the data caused by one-time events such as strikes or holidays. Economists say initial claims in a range of about 300,000 to 325,000 are consistent with the creation of about 100,000 to 150,000 jobs in the U.S. economy each month.
"The underlying pressure on claims may well be turning upwards," wrote Ian Shepherdson, chief U.S. economist for High Frequency Economics.
Like it or not, unless there are mammoth manipulations in the participation rate, unemployment has bottomed. On August 21 Reuters reported Financial job cuts soar on housing woes.
A deepening U.S. housing slump has caused an alarming surge in job losses at U.S. financial services companies, and the end is nowhere in sight, consulting firm Challenger, Gray & Christmas Inc. said on Tuesday.Birth / Death Model Flashback
The industry has announced 87,962 job cuts so far this year, 75 percent more than the 50,327 recorded for all of 2006, Challenger said. Nearly one-fourth of this year's cuts have been announced in August alone.
Of this year's cuts, 35,830, or 41 percent, were tied to housing market troubles, including riskier subprime mortgages. Job cuts by real estate and construction firms totaled 21,620, more than twice the number for all of 2006, Challenger said.
"Many companies expected the mortgage situation to implode; they've just been wondering when the bubble would burst," Chief Executive John Challenger said in an interview. "But many are stopping on a dime, shutting down operations.
"Companies are not surprised by what's happening, but the reality of the situation and the speed with which it occurred is shocking," Challenger added. He said it could be months before housing-related job cuts peak.
April has been the year's busiest month for financial job cuts, Challenger said. That month, companies announced 33,789 cuts, including 17,000 by Citigroup Inc and 3,200 by bankrupt mortgage lender New Century Financial Corp.
Meanwhile, home foreclosure filings in July surged 93 percent from a year earlier and rose 9 percent from June, to 179,599, according to a Tuesday report by research firm RealtyTrac.
John Challenger said it's understandable for mortgage workers to feel whipsawed. Countrywide, for example, cut 500 jobs last week after having added 6,931 jobs from January to July, with increases in every calendar month.
"It's devastating (for morale)," he said. "It's hard to keep morale up, given the boom-bust nature of the mortgage sector."
A new monthly jobs report will be coming out soon, but let's take another look at the previous Birth Death Model adjustments. Here is the table:
(click on chart for a sharper image)
I talked about construction jobs in Fed questions the BLS jobs model and Employment on Pluto Rises but now it's high time we start seriously questioning a model that assumes new businesses are actually adding jobs in the financial services sector.
Implode-O-Meter Stats vs. the BLS
A quick check on the Mortgage Lender Implode-O-Meter shows that 145 major US mortgage lenders have gone out of business or stopped making certain loans since December 2006.
Perhaps Aaron Krowne at Implode-O-Meter can give an official count on this, but recollection serves that over 100+- of those lenders stopped lending one way or another sometime in 2007.
Meanwhile back at the BLS, I see the stats show more jobs in financial services are assumed to be created by new businesses as opposed to being lost by firms going out of business for the months of....
- February - 11,000
- March - 8,000
- April - 26,000
- May - 7,000
- June - 6,000
- July - 6,000
Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/
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