More Signs of Bottoming

From the Department of Labor:

In the week ending June 6, the advance figure for seasonally adjusted initial claims was 601,000, a decrease of 24,000 from the previous week's revised figure of 625,000. The 4-week moving average was 621,750, a decrease of 10,500 from the previous week's revised average of 632,250.

The above chart indicates several important points. First, the 4-week moving average topped out in roughly mid-April and has been declining since. That's 6 weeks of a decline --- not enough to say with certainty the trend is clear but enough to say there is a strong possibility the trend has changed. Second, note the total number has been fluctuating between 600,000 and 660,000 or so since late February.

Combine that chart with this one:



And you see the possibility of further declines is more likely than not. This is good because unemployment claims are the front-end of the labor market; claims must drop before we can see improvement in the longer term measures of unemployment.

In addition,

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $340.0 billion, an increase of 0.5 percent (±0.5%)* from the previous month, but 9.6 percent (±0.7%) below May 2008. Total sales for the March through May 2009 period were down 9.7 percent (±0.5%) from the same period a year ago. The March to April 2009 percent change was revised from -0.4 percent (±0.5%)* to -0.2 percent (±0.2%)*.

The above chart divides the last 9 months into two categories.

1.) The end of last year when sales crashed and burned.

2.) The last 5 months when the month over month change fluctuated more around 0% change -- an improvement.

Also note that retail sales increased .5% without car sales.

Bottom line -- this is good news.

Weekly Unemployment Increases 44,000

From the Department of Labor:

In the week ending Feb. 10, the advance figure for seasonally adjusted initial claims was 357,000, an increase of 44,000 from the previous week's revised figure of 313,000. The 4-week moving average was 326,250, an increase of 17,500 from the previous week's revised average of 308,750.

Watch the 4-week moving average.

What's interesting about this report is that despite a large increase, there are only two states in the 1,000+ layoff category.

According to CBS Marketwatch

The unemployment lines grew longer last week, in part because of bad weather in the Midwest and Northeast, the government reported Thursday. The number of people collecting unemployment benefits rose to the highest level in a year.

So at least some of this is weather related. We'll have to see if the trend decreases over the next few weeks.

Construction Layoffs In Last Unemployment report

For the last few months, I've been looking at the weekly unemployment reports to see how the housing slowdown is impacting construction employment. There have been some pretty sizable layoffs, and last week was no exception.

California had 10,000+ layoffs in "construction and service" employment.

Minnesota had Pennsylvania had 4000+ layoffs in construction or "construction, trade and service."

Florida had 3400 layoffs in "construction, trade, service, and manufacturing industries."

I am expecting this slow bleed to continued for some time. We've had a rash of homebuilding companies report very negative numbers for the 4th quarter. While housing inventory decreased in the latest existing homes survey, it's still had very high levels. Sales in 2006 dropped the most in over a decade. In other words, the soft landing for housing is still suspect.

Good and Bad News in the Unemployment Report

From the Department of Labor:

In the week ending Jan. 6, the advance figure for seasonally adjusted initial claims was 299,000, a decrease of 26,000 from the previous week's revised figure of 325,000. The 4-week moving average was 314,750, a decrease of 1,750 from the previous week's revised average of 316,500.

Here's the bad news: 8 states had 1,000 or more lay-offs caused in part by construction losses. Pennsylvania and Wisconsin each had more than 17,000 lay-offs. On the good side, Florida had fewer construction related lay-offs.

While the overall decrease is good, this is the third week in the last 6 when construction related lay-offs have caused 1,000 or more lay-offs in more than a few states.

Weekly Unemployment Claims

Each Week's Claims have a list of 1000 or more layoffs. There were 12 states with 1,000 or more lay-offs in the construction or manufacturing sector.

Earlier in December we saw a ton of 1,000+ layoffs in construction.

We don't have a trend yet, but we're getting nearer to a nasty upswing. That makes tomorrows employment report very important. Aside from the macro-number, look at the subparts -- especially manufacturing and construction.

Also, we'll have to watch these figures in the coming weeks to see what February's number looks like.

Weekly Unemployment +1000

From CBS MarketWatch

The number of U.S. workers filing new applications for state unemployment benefits rose slightly in the latest week while continuing jobless claims climbed to their highest level in almost a year, the Labor Department said Thursday. Initial jobless claims rose by 1,000 in the week ended Dec. 23 to 317,000, the Labor Department said in a report. But in a sign of slackening in the U.S. labor market, continuing claims, or people continuing to collect state unemployment benefits, rose by 16,000, to 2.53 million, in the week ended Dec. 16. It's the highest level since Jan. 28. The four-week average of continuing claims rose to its highest level since Feb. 18, to 2.51 million. The four-week average of initial claims fell by 10,250 to 315,750. This marked the lowest level since the week ended Nov. 11

Let's break this down into bite-sized economic morsels.

Initial jobless claims rose by 1,000 in the week ended Dec. 23 to 317,000, the Labor Department said in a report.

Not a big move. I would consider this statistical noise.

continuing claims, or people continuing to collect state unemployment benefits, rose by 16,000, to 2.53 million, in the week ended Dec. 16. It's the highest level since Jan. 28.

This is not good and shows signs of weakness. We need a bit more information about these people -- what industries employed them, what is their age etc.. -- but this raw number indicates the employment picture is probably weakening.

The four-week average of continuing claims rose to its highest level since Feb. 18, to 2.51 million.

Because the initial numbers jump around a bit, economists use a 4-week average to smooth out the jumps. However, this increase in the 4-week moving average confirms that employment prospects may not be as great as the low unemployment number indicates.

The four-week average of initial claims fell by 10,250 to 315,750. This marked the lowest level since the week ended Nov. 11

This is better news on the short-term front.

Let's look at the news release because there is some important information. Unfortunately it does not paste well into Blogger. So -- go to the page and notice that the number of states with fewer construction lay-offs comes in at 7. Earlier in December there was a rash of states with construction lay-offs. That seems to be slowing down for now which is a good economic sign. However, with a slowing housing market still, we may not be at the end of construction lay-offs.

Weekly Unemployment Claims Down 20,000

From the Department of Labor

In the week ending Dec. 9, the advance figure for seasonally adjusted initial claims was 304,000, a decrease of 20,000 from the previous week's unrevised figure of 324,000. The 4-week moving average was 327,250, a decrease of 1,500 from the previous week's unrevised average of 328,750.

The 4-week average notched down, but it's still in a small uptrend. However, here's what I'm interested in:

13 states had 1000 or more lay-offs in construction. This is the second week in the last month with a lot of construction lay-offs. Winter construction lay-offs are standard practice. The question is, "will there people get rehired"?

Construction related employment was stagnant for most of this year, as this graph from the BLS indicates:



The graph indicates construction employment has topped and will now go into a decline, especially as the housing market continues to cool. Given the present set of economic variables, it's more likely this months lay-offs won't be rehired in the spring.