Did you catch that? Yesterday while we were all making our predictions for 2009, we had our first significant indicator of what results to expect because of the swift policy actions of our Federal Reserve leaders.
The Labor Department reported that initial claims for jobless benefits fell by 94,000 to a seasonally adjusted 492,000 in the week ended Dec. 27. The claims were down from the unrevised level of 586,000 the week before.
The drop surprised almost all economists surveyed by Dow Jones. In fact the drop was almost 9 times greater than than the consenses estimates. And I must admit such a significant drop surprised even me.
It's time again to remember that when it come to macro economic condition analysis, "the majority is always wrong."
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Well, the unemployment rate in November 2008 was the highest in 14 years so a *drop* that was the biggest in 16 years is not so much good news as kind of cosi-cosa news.
ReplyDeletehttp://www.cbc.ca/money/story/2008/11/07/usjoblessrate.html?ref=rss
Cuervos,
ReplyDeleteThanks for reading. As I've analyzed this a bit more what has been happening through most of December is a significant drop in NEW claims for unemployment each week. That doesn't mean that claims are not still happening, just that the total number that are filing each week is declining. This past week was the largest decline in 16 years.
When you look at the unemployment chart in this post:
http://mast-economy.blogspot.com/2008/12/new-years-week-safe-harbor-statement.html
You'll see an inflection point in the actual rate of unemployment, and this week's reported drop in initial claims is a very positive indicator that unemployment will begin to drop again very soon.
In San Jose, tech companies are shutting down left and right, restaurants are empty.
ReplyDeleteIt's much worse than the recession after 911.
Layoffs in San Jose will be higher in Q1 2009.
These statistics have nothing to do with the real world I see every day firsthand.
There is no good news at this point. The economy will be doing good to emerge out of recession mid 09.
Anonymous,
ReplyDeleteThanks for reading.
Very sorry to hear layoffs in San Jose area. I used to live around there and also saw it as a boom and bust town.
What I have also seen since the early 80s out there is that when times are tough in Silicon Valley there is a huge up-tick in small startups. As folks get laid off they seem to rise to the challenge to focus on brand new tech innovation.
I truly, wish you and that area much success in 2009.
OK, 2.4 million people are out of work in 2008 and a .16% increase in one tenth of the US represents good news?
ReplyDeleteI'm all for "what you herd [sic] is wrong" but, I'm way more inclined to look at the numbers quoted in bloomberg.com than put any stock in what appears to be a momentary aberration.
There's no doubt that there are areas of the country that are being harder hit than others. The point is America, 94% of people that wants jobs, have jobs.
ReplyDeleteAnd frankly since you don't hear the least bit about anything good coming from our economy, there's no shame in pointing out even the smallest improvements, because small as they are, at least they are improvements.
It's easy when times are tough to feel bad, focus on the negative, and this is exactly what the evening news would have...
Because one thing that media knows is that in bad times...people do things that are cheap like oh say...watch TV, and listen to the radio.
So keep up the good work, stay positive. Not to sound like Tony Robbins or anything, but if you drink the Kool Aid and go negative, you haven't a chance. If you stay positive, look for the positive, work hard, this thing will resolve. Let's face it, we all know times are hard right now. But they've been far, far worse, and we've ALWAYS come back...we're America baby!