US Jobless drop sharpely

From imposter ColumbiaCounty, not columbiacounty.

i am bafled by why one anonymous poster would want to pretend to be another anonymous poster. why not just have a chat with yourself?

a good psychology textbook might come in handy, cc.

does bls release figures for the number of people who have run out of unemployment benefits weekly? i'll have to explore.

I find all of this quite amusing...and annoying. It takes away the purpose of why some of us are here.

i think it's all one person who is targeting bears and trying to make it seem like they are all turning more positive. what a joke.

So unemployment is dropping? How's that possible? The bulls case seem to be getting better and better.

i agree. i have learned a lot here on a variety of subjects but am becoming increasingly bored interacting with the crazies.

This number just reflects people who ran out of unem. benefits. The startling number of people who were due to run out of benefits the beg. of June was exactly why NYS decided to give ANOTHER 13 week extension on top of the already 33 week extension.

infamous, it takes literally two seconds to determine if you have any interest in a given thread. if you don't, feel free not to participate.

cc, i don't mind the crazies. they are kind of interesting. but hijacking identities is contemptible.

From wiki:

Borderline Personality Disorder (BPD) is a psychiatric diagnosis in the Diagnostic and Statistical Manual of Mental Disorders (DSM-IV Personality Disorders 301.83)[1] that describes a prolonged disturbance of personality function characterized by depth and variability of moods.[2] The disorder typically involves unusual levels of instability in mood; "black and white" thinking, or "splitting"; chaotic and unstable interpersonal relationships, self-image, identity, and behavior; as well as a disturbance in the individual's sense of self. In extreme cases, this disturbance in the sense of self can lead to periods of dissociation.[3] These disturbances can have a pervasive negative impact on many or all of the psychosocial facets of life. This includes difficulties maintaining relationships in work, home and social settings. Attempted suicide and completed suicide are possible outcomes, especially without proper care and effective therapy.[4]

"So unemployment is dropping?"

No, unemployment is likely still increasing. As csmack points out, this is ppl either no longer qualifying for benefits, those who left the work force (i.e., no longer looking to work) who had benefits, or those who found a job.

and as AR has pointed out a number of times, none of these numbers captures hourly workers who are consistently losing hours due to slow business conditions. or the numerous reductions to salaried workers taking pay cuts.

finally, some good news! I like good news, even if it's posted by a troll.

Well the stock market is rising today with financials bouncing off support. but most of the rise is due to consumer staples and drugs and other healthcare stocks. in other words recession stocks. one would expect these stocks to be selling off at this stage in the "recovery" cycle. market is looking sickly and i think we are going to have a double dip recession.

oh and interest rates rising, too fast in my opinion. are we going to get stagflation?

or it could be people whose benefits ran out...just maybe

"are we going to get stagflation?"

Considering that CPI YTD is NEGATIVE 1.3% or so, no.

NYC Jobless Rises to 9%, Second Biggest Jump in Three Decades
2009-06-18 17:59:59.961 GMT

By Jeremy R. Cooke
June 18 (Bloomberg) -- New York City’s unemployment rose a full percentage point to 9 percent last month, the second- biggest jump in the past 33 years after February’s record, according to state Labor Department data.
The jobless rate in the most populous U.S. city reached the highest since October 1997, while unemployment in New York state overall rose to a 16-year high of 8.2 percent in May, the department said today. Both were still below the national average of 9.4 percent last month.
“The city’s job market is still weak and the weakest areas, financial activities and professional and business services, will not resume growth until after the national economy improves,” James Brown, principal economist at the New York State Department of Labor, said in an e-mailed release.
The city’s unemployment rate was 5.1 percent a year ago.
New York, the third-most populous U.S. state after California and Texas, has lost 212,000 private-sector jobs since August 2008, more than half of the 400,000 jobs added in its five-year economic expansion through last year, the department said in a separate release. The number of unemployed state residents rose to 802,400 in May, the most since July 1976.
“New York state remains in recessionary mode,” Peter Neenan, director of the research and statistics division, said in a statement. “Nonetheless, the state continues to remain well below the national unemployment rate.”

cfranch, i'd think we will eventually. but for now this:

http://www.ritholtz.com/blog/2009/06/cpi-june-2009/

along with this:

http://www.calculatedriskblog.com/2009/06/report-state-personal-income-tax-cliff.html

would temper the flation part. we've got de and stag.

like this quote: “Deflation is a fact; Inflation is an Opinion.” the 26% drop in state revenues is shocking. am i missing it, or is the mainstream media just ignoring this?

"More green shoot everywhere"

Hey CorumbiaCounty, I like green shoot. You maybe make me chicken with green shoot?

whoops, wrong one. i'm legit. how about some diced chicken with walnuts?

I know you're legit, cc. I'm do enjoy addressing your imposter, though.

Oops. "I do enjoy"... I guess it really is contagious.

here's a pretty graph to show how well we're doing on the unemployment front.

http://blogs.reuters.com/felix-salmon/2009/06/18/unemployment-datapoint-of-the-day-3/

cc, it's weird. the msm seems to cycle through news topics. this isn't part of the current cycle, but it seems to me to be absolutely essential to understanding what's coming over the next two to three months. most states start their new budget year in july. people are receiving layoff notices now, and the situation seems to get worse daily. it's fugly.

aboutready: The MSM cycles through topics because they can empirically only manage about seven topics at a time (if I remember the research correctly). There is actually an entire body of academic communications research on this -- agenda setting theory.

i've definitely noticed it. funny, maybe i studied it in college, because it should have been covered in my area. i'll have to look it up. it has fascinated me.

i'm still stuck on the 26% figure. is there some catch like offsetting other taxes or some type of seasonality? if not, lets assume (and i have no idea so i am making this up) that the fed stimulus package makes up 8% of difference...so assuming that taxes aren't going to be raised, that means an 18% reduction in expense---the bulk of which, I assume, is labor. please tell me what i'm missing here.

Monthly data is not annual data, but its consistent with many other states. And I don't just mean California. I mean Alaska, Il, FL, you name it...

cc, what really amazes me is that the economists are not ranting about this. DeLong is one of the few, and that is where that reuters chart came up. i went to the source (i trust salmon, so i hadn't done it earlier), and he addresses the crisis that will be forthcoming because of the states. Everyone thinks it's just California, but it's not. Any state that relies heavily on personal income taxes for their revenue (and, of course, real estate taxes) is in a deep pile of crap. this is JUST income tax revenues, doesn't include sales tax, corporate taxes, etc. Krugman was beating this drum earlier, but has been oddly silent for the Keynsian that he is. someone referred to it as having 50 herbert hoovers minding the states' tills. most of them have no option but to cut spending in a draconian fashion, their state constitutions mandate a balanced budget (unlike the good old USofA).

http://delong.typepad.com/sdj/2009/06/comment-for-the-economist-on-christina-romer-2009-the-lessons-of--1937.html

Jason, the personal income tax chart was showing the firsst four months of the year, not just one month.

ok...that puts a little color on this...so, fair to say four main components of state revenue: fed money (including stimulus), property taxes (which are going to be similar to last year), state income tax and sales tax (down but doubt that its down over 10%). so once again, the death of a 1,000 cuts....overall, probably not down 26% but certainly half that?

p.s. what is the update if any on California?

"infamous, it takes literally two seconds to determine if you have any interest in a given thread. if you don't, feel free not to participate."

As someone who has run a MUCH bigger forum than this one for almost a decade, I can tell you that does not work. there is always a lot of very interesting discussion which occurs due to "thread drift" and if you ignore every discussion that doesn't look promising from the start, you very often lose out on the best a forum has to offer. It is VERY easy for trolls to ruin a forum by polluting many threads until people just stop bothering (I could name dozens where it happened).

"are we going to get stagflation?"

"Considering that CPI YTD is NEGATIVE 1.3% or so, no."

See? You don't have to worry about stagflation. It's just nice normal deflation. No worries.

depends on the state. for some it will be more than 26%, i'd think. you also have to weight the first four months more heavily, as April is the biggest tax collection month. there are about seven(?) states that don't have income taxes, but most of those i believe rely on high taxes elsewhere. property taxes won't be the same in areas that had high numbers of foreclosures last year, and real estate transfer taxes are in the sewer in many places.

the bottom line is that many of the most populous states are getting reamed. and remember, it's getting worse monthly. that unemployment chart is important, because as it creeps up and does so at such a higher pace than the government predicted, the states go tumbling down. they can't print, and the worst states aren't having the easiest time of it with their bonds as well.

Regarding California, it hasn't been in the news cycle the last two days. I'll see what i can find, as i'm very interested in what goes down there.

From aboutready's pretty graph:

"1) Does this mean the recovery plan has failed? 2) Or that it was even more necessary than we thought at the time? 3) Or both?"

Definitely 1, possibly 2, but if 2, then 3.

30yrs, that's why we took measures when it the abuse became egregious. All threads don't have to be all things to all people. and i'd argue that we are entering a time when blogs are evolving. people can stay or go as they wish, telling them to do so is useless. ignoring them doesn't work for YOU, because you have the patience to follow for that thread drift, but your style is but one of many.

"p.s. what is the update if any on California?"

We may finally get to see "Predator 3"?

There isn't really anything inherently problematic about collapsing state spending -- if federal spending kicks in to offset the gap at the state level.

And -- it has positive effects by concentrating spending and fiscal policy setting at the federal level. That is: let the states go bankrupt -- they were always more corrupt spenders than the federal level, they have wasteful industrial policy, and they are lousy at developing social policy anyway. The bankruptcy of the states may roll back the cause of Federalism by years. Ironic, huh?

All that said, I'm not very confident that actual federal spending will truly offset state-level gaps.

let the states go bankrupt? what does that mean?

"30yrs, that's why we took measures when it the abuse became egregious. All threads don't have to be all things to all people. and i'd argue that we are entering a time when blogs are evolving. people can stay or go as they wish, telling them to do so is useless. ignoring them doesn't work for YOU, because you have the patience to follow for that thread drift, but your style is but one of many."

It's not that I don't understand what you are saying, but I just have an awful lot of experience in a narrow amount of areas: RE and internet message boards being 2 of them. There has never been a forum which survived a "troll attack" without some pretty heavy handed moderation. I've just seen it happen a lot more because I've owned boards for so long (for example, I own a board on another subject which is local to NY and has over 70,000 members and closing in on 1 million posts).

Where were all you people last year when Patterson TOLD US THIS WAS GOING TO HAPPEN? (Bloomberg, too)

Maybe I can pick up Los Angeles at the bankruptcy auction?

forbes just had "the top ten most f*cked up state budgets" or similar, and there were worse off ones than CA or NY. So down 26% is not the worst, no. Alaska was off 30% (lower oil prices) I remember.

oh 30yrs, stop it. we were right here, some of us. many of us have been (some horrifically) vocal about state and local spending. and very aware of the consequences of unemployment and declining real estate values on tax receipts.

skinny, your last line, to me, is the only one that matters practically. intellectually, and philosophically, yes the states rights vs. federalism issue is one that seems to be one that needs vast reconsideration right now. but they need to get through health care (how they're going to manage that with the states going close to under is unclear to me), environmental concerns, and maybe a nod to reform of regulation of the business world.

jason, 26% was the AVERAGE of the 30 something states reporting. huge. 30yrs, go for Santa Barbara or Santa Cruz.

Agreed: the only thing that matters at this point is whether the fed picks up the slack -- somehow, either through direct federal spending or state bailouts.

I was pointing out that the selection of mechanism of relieving state pain -- direct federal spending or state bailouts -- may have an immediate positive consequence -- Fiscal policy centralization -- which could actually help us more easily navigate current problems. The point about Federalism was secondary.

skinny, assuming state bailouts. i am stunned that it's taken this long to do so, and now there seems to be little will to do anything, including health care. i firmly think health care has to get done, and even there i'm having some doubts, but the states issue just bemuses me to hell. what will it take to get some aid done?

but fiscal policy centralization is somewhat akin to federalism, no? and i agree btw, entirely. as wasteful as our federal government is, there is no contest in terms of most states.

To answer your last question: I was using Federalism with a capital F to refer to "New Federalism". As confusing as it is, this is where you find the states rights position today. Should have been clearer. Sorry.

no problem. haven't kept up, clearly. should keep my toes more in the political waters as well as just the economic swill. if you have any good articles, please do post them on the important economic links thread.

http://finance.yahoo.com/news/Jobless-benefit-rolls-post-apf-1306581616.html?x=0

But that doesn't necessarily mean more companies are hiring. Fewer people are receiving jobless aid largely because more of them have exhausted their standard unemployment benefits, which typically last 26 weeks.

Government figures, in fact, show the proportion of recipients who used up their jobless benefits averaged 49 percent in May, a record.

AR - Remember, this is a part of the recovery process. We cannot start to add jobs until the losses stop (overstatement of the obvious). It will be a long, slow process because just about every sector has been hit hard. Companies will not start adding jobs until they feel things have stabilized and that is not going to be like a switch being turned on.

The companies that are the strongest will replace lost jobs and add new jobs first. Then other companies will begin replacing lost jobs. Then, a bit later when they have the capital they will add new jobs. Then, still later, the weakest companies that have survived will begin to replace the jobs they cut and down the road add new jobs. It is going to take time, but this is still as positive of news on jobs as we could hope for given the circumstances.

"jason, 26% was the AVERAGE"

Whatever, NY was not THE worst. It was like #6 on the list or something. You can look it up on forbes.

waverly, that commentary wasn't mine, it was from the article. there was no decline, there were huge numbers of people losing unemployment benefits. the continuing claims number, given that so many people are running out of ue benefits, is difficult to use to track any trends.

of course it is a process, but for now the process does not seem to be stabilizing that much.

sorry cannot help myself:

"We cannot start to add jobs until the losses stop (overstatement of the obvious)." yes, but job loss slowing (which, by the way, doesn't even seem to be the case) does not mean that job creation will start; i.e. it is a necessary condition but far from a sole determinant.

something has to stimulate demand at something approaching prior levels. what?

jason, if you take into account the relative percentage of revenue derived by a state from income taxes we were second, behind Oregon.

http://1.bp.blogspot.com/_pMscxxELHEg/Sjppfz5J-lI/AAAAAAAAFjw/Bz7QPMXx6b0/s1600-h/ImpactPIT.jpg

cc - Job losses do appear to be slowing...not stopping, but they are slowing.

Many companies CAN add jobs right now. They won't do that, however, until they feel that the recession has slowed considerably. If companies believe that they will not be throwing their capital away, they will add jobs. By adding jobs they can grab more of a market share and make more $ (that is what stimulates the demand initially). Companies can either make more money by getting more out of what they have (more sales out of the same model they have now - not likely, higher prices, lower margins, less employees, etc) or they can make more money by growing (adding a few more salespeople, opening a new office, creating a line of business, providing a new service, etc).

But, if these companies believe that the economy is still spiraling down, they are not going to throw their capital away on jobs they may have to turn around and cut in 2 months to stop the bleeding.

actually waverly i'll look for it but i saw an academic analysis recently that said that that will not happen this time because so many employers have reduced the hours/furloughed people. they'll just start making their underutilized employees work harder, which will be good for those employees but not the unemployed.

life is not a textbook.

"By adding jobs they can grab more of a market share and make more $ (that is what stimulates the demand initially)." huh? would this work for an automaker? can ford grab more market share by adding jobs?

and by the way..."grabbing more market share" clearly implies that someone else loses market share, right? so for the economy as a whole, how does company A adding jobs while company B loses jobs help?

AR - that happens every recession and is part of the process as well. Using underutilized employees will be a reason things will take longer to recover. At some point, though, you can only get so much out of a certain number of employees and you need to add more headcount. Most companies are running pretty lean, so any meaningful increase in sales can lead to e need for new employees.

CC - No textbook here. I run a company, but thanks for jumping to conclusions. The auto industry is in bad shape and it is going to take a long time for them to turn that around. However, the overwhelming majority of Americans don't work in the auto industry. Most of them work in small and mid-sized companies, as well as other huge corporations that are in much better shape today than the auto industry.

Company B isn't losing jobs. They are staying flat. Company A sees that the worst is over. They will take their capital and hire more people to increase sales, gain new clients, enter a new market, start a new business venture, etc. The competition has already been thinned out in most industries.

As people feel the worst is over, they will spend a little more, companies can borrow money (and pay it back), service organizations will get more business and everything feeds off of each other. It is not going to be like a switch being turned on, but it is starting to happen....slowly.

I finally found it. San Francisco Fed. Not all recessions are created equally.

http://www.frbsf.org/publications/economics/letter/2009/el2009-18.html

"Although the pace of layoffs appears to be subsiding and the overall economy is showing hints of stabilization, most forecasters expect unemployment to continue to increase in coming months and to recede only gradually as recovery takes hold. In this Economic Letter, we evaluate this projection using data on three labor market indicators: worker flows into and out of unemployment; involuntary part-time employment; and temporary layoffs. We pay particular attention to how these indicators compare with data from previous episodes of recession and recovery. Our analysis generally supports projections that labor market weakness will persist, but our findings offer a basis for even greater pessimism about the outlook for the labor market. Specifically, we suggest that the relatively low level of temporary layoffs and high level of involuntary part-time workers make a jobless recovery similar to the one experienced in 1992 a plausible scenario."

AR - good information.

I do think this jobs recovery is going to be slow and steady and not a snap-back. The ability ( or inability) of small and mid-sized companies to get lending is clearly having a greater impact today than in 2001 or 1991. That is likely contributing to some of the people having to go to part-time work, as the employers only have so much they can spend.

Another interesting wrinkle is that there are some huge companies (think Wal-Mart) who have tens of thousands of employees on the payrolls as part-time employees as a standard business practice (to avoid paying benefits) which didn't happen as much in 2001, but especially when compared to 1991.

hopefully we can get some real investment in other areas to provide some manufacturing jobs. that would free up some of those wal-mart positions for people who find themseles needing to supplement retirement income, etc. it just seems as though much of the employment ladder has had two to three steps permanently chopped off.

I am hopeful both of those will happen, but it is definitely down the road a ways.

i'm still missing what is going to stimulate demand. from everything we've already covered, it seems clear that there is still a lot of unemployment to come from the public sector regardless of the stimulus package.

i'm only using the auto industry by way of example. with perhaps the exception of some parts of health care, i still think we have come to the end of a long term cycle based on considerable over consumption. to roughly quote w67thstreet: "once you have six salad shooters, how many more do you need?"

i think a dialogue has got to start (and i recognize that it is political suicide) about planning parts of our economy around the fact (which in many ways is actually positive) that we have significant over capacity.

I am not sure that I would use the word "demand", but there is opportunity there for growth right now. Companies cannot, and will not, pull the trigger to hire people unless they think the worst is behind us. Capital is too precious to throw down a black hole. I think you are expecting there to be this sudden great demand for goods/services and then companies all rushing to hire people. It is just not going to happen like that. Bits and pieces will trickle back when they can.

My company has had to lay people off, but we are looking to hire now. Business appears to have stabilized and is actually showing signs of picking up. To meet this pick-up in activity, make more sales and capture a larger piece of the market, we are looking to hire. We could have done this 6 months ago, but chose not to, because business was sketchy, feedback from clients gave no indication of needs and our lending situation was in the air. Today, business is better, clients are telling us they have business or expect to shortly, our ;ending situation has stabilized and we are moving forward. It isn't going to be "full steam ahead" but it is improvement and it is job creation.

Also, w67th is a good guy and always entertaining, but that is just too simplistic and naive of a statement.

are you comfortable giving us a vague or precise idea of what type of business you're talking about? i am most familar with various aspects of the media business and that remains an unfolding horror show.

cc, we have just spent a decade or two moving away from production to consumerism, housing and services. many who would once have gone into engineering, research, product design, did not do so. if we can fix the healthcare issue, and pensions, and those are huge ifs, we could be in a position going forward to become competitive in emerging production opportunities. the US does fairly well in the sophisticated manufacturing areas, such as turbines, planes, etc. an increasingly urgent need for efficiency in resource utilization, climate control, modernization of medicine, the electrical grid, infrastructure, these could all generate employment, and some of it devoted to creating completely new products and opportunities.

we don't need more salad shooters, but that's to the chagrin of the Chinese. we don't make salad shooters, we only stock them and sell them. much of that type of production went overseas decades ago.

this will take time, and governmental support, which may mean it will never occur. but it could. we need a new NASA, a new Bell Labs.

"This number just reflects people who ran out of unem. benefits. "

exactly right. typical of persistent high unemployment. running out of benefits before finding a job feels like being fired twice to these guys. many don't make adjustments to their big ticket items while they have benefits, like their living arrangements and just concentrate on finding another job. it would be interesting to know how that changes (living arrangements, mobility and time used finding a new job) once they don't receive that benefits anymore.

"this will take time, and governmental support, which may mean it will never occur. but it could. we need a new NASA, a new Bell Labs."

it will take improving math & science in public schools (middle and high). that could end up being as big of a challenge as health care and the retirement issue.

cc - I am an owner of a recruiting firm, so the jobs situation affects us directly and it has certainly been challenging. Some divisions are still struggling mightily, while some are improving. Our legal area, for instance, has been decimated (as is the case with most firms in that niche) and it does not look pretty going forward. I would rather not say the exact area I am in if that is okay.

although i think that improving math and science is important, i would imagine that merely moving the existing and future brainpower that has been involved in financial services would give us a nice jump start. i think AR cites a logical starting point.

this gives you numbers that speak a thousand words.

http://www.ritholtz.com/blog/2009/06/exhausted-claims-part-ii/

Another surge in mass layoffs. Perhaps steveF will say that we willed it to be so. What an ass.

http://www.reuters.com/article/domesticNews/idUSTRE55M44820090623

New Jobless Claims Rise Unexpectedly To 627K, 6.7M Still Unemployed

http://www.huffingtonpost.com/2009/06/25/unemployment-new-jobless-_n_220640.html

...and yet the Dow is up 100+ today

I'm sure its explainable but I fully admit to complete and utter bewilderment when it comes to this stuff.

> here's a pretty graph to show how well we're doing on the unemployment front.
> http://blogs.reuters.com/felix-salmon/2009/06/18/unemployment-datapoint-of-the-day-3/

Whoah.

Seriously, if you haven't looked at that... check it out.