Several people have commented that unemployment data should be coordinated with unemployment exhaustion rates. Fair enough.
The information is from the department of labor. Unfortunately, they use a flashbook format which I can't copy. So here is the link:
http://www.doleta.gov/unemploy/chartbook/chartrpt.cfm
Use data batch number 7.
The information is important for several reason:
1.) Unemployment exhaustion is currently at an all-time high. This is the point people think is important (which it is).
BUT
Coordinate the DOL data with NBER business cycle data found here:
http://wwwdev.nber.org/cycles/cyclesmain.html
Notice that spike in exhaustion rates typically happen at the end of recessions.
That jibes with information found in this post where I note the 4-week moving average is moving lower, the Challenger job cuts report is dropping and the seasonally adjusted mass lay-offs are dropping.
Let me add this: I am not saying it's good that unemployment benefits are ending, nor am I saying anyone who has lost benefits can go to hell. I am not saying that in any way, shape, or form. These people need an extension of benefits.
However what I am saying is this is another data point that indicates we're probably near the end of a recession.
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8 comments:
And I will bet the other way---
This assumes a business as usual outlook.
I don't think we can maintain this level of complexity much longer, and will continue to deflate, as feedbacks start having trouble keeping equilibrium.
Is the exhaustion of benefits in any way a causal factor?
print screen works.
you have to keep in mind though all the layoffs sure to come in july from states going broke/ not passing budgets/passing budgets with big cuts
there is no way we are anywhere near the end of this. it will last until a year past all the option arm and alt a resets and all the resulting prime defaults(and those will all be affected by those exhausted benis), really its all a big cascade that will kill some huge banks.
also today they announced another slice and dice and markup of some garbage mbs (so they can give it to the fed?)- and there is no way that fraud is going to end well.
Notice that spike in exhaustion rates typically happen at the end of recessions.
Well of course that's true. There should be a correlation between the duration of unemployment and exhaustion. The highest rates of unemployment are right as things turn around.
That we're at a high point in exhaustion doesn't mean that we're at the turnaround. We'll just see that exhaustion rate climb until the turnaround making the peak at some point in the future.
You keep saying that we are near the end of the recession. Apart from charts and tables, what does the end of the recession look like. Clearly, GM is not going to 'bring back' it production workers as it did at the end of other recessions. Describe the end of recession in sociological terms instead of second derivatives.
Tom
the only point these data are making is that this recession is longer that usual, so people are running out. Benefits run out at six months, the average length of the down leg. This is not an average recession.
This is a subject that has puzzled me for years. My interpretation of the initial claims vs continuing claims doesn't jibe and the factor that seems to mean the most is the longevity of the unemployment cycle. I am thinking that it works like this: You lose your job (initial claim) you look for new work and in most cases find something b4 your benefits run out. However, if the length of the downturn is entensive (as is likely with this downturn) many folks will unfortunately run the course of the unemp ins available (yes it is longer now withthe emergency packages, but imagine all the unlicky people that lost their jobs in the beginning of the crisis! Anyway, I would expect the continuing claims number to begin to drop, not only b/c people find work, but b/c their benefits run out. I believe this is called the exhaustion rate. What I would love to see is the avg weeks of benefits used and whether that number is growing or not. anyone have thoughts on this?
That’s right. Unemployment is increasing day by day. Though there are job openings but still the case is very worse, since the companies are selective, and depending on the need, they take their time in finding the right candidate.
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