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alstry (35.39)

Class Time for some CAPs players

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May 14, 2009 – Comments (20)

For the past who knows how many weeks, the WEEKLY FIRST TIME unemployment claims have been coming in OVER 600,000 PER WEEK.

For the past few weeks, Alstry has blogged if we keep up at this pace.....OVER 30,000,000 Americans will file for unemployment in 2009!!!!

Each time Alstry blogs....there is always one or two blogger who seem to want to point out that the weekly numbers are really monthly numbers even though the government and press calls them weekly numbers.

It is amazing how fuzzy people's vision can be with things seem sooooo clear...at least to Alstry!!!!!!

Further, if it was a monthly number....it would be mathematically impossible that 6.5 million people would be collecting unemployment benefits as less than 4 million people would have filed first time claims the past 6 months in TOTAL.....and that discounts the significant numbers that were likely able to find replacment work during that period and no longer eligible for benefits.

If Alstry is wrong on this issue.....a clarification would be very much appreciated.

20 Comments – Post Your Own

#1) On May 14, 2009 at 1:25 PM, alstry (35.39) wrote:

Hopefully the following clarifies things a bit:

Highlights
Reacceleration in job losses, now fed by auto shutdowns, is the unfortunate theme of the latest jobless claims data. First-time claims for the May 9 week jumped 32,000 to a much higher-than-expected level of 637,000 (prior week revised 4,000 higher to 605,000). The Bureau of Labor Statistics, according to Market News International, can not yet quantify the effect of auto sector layoffs but is confirming its impact in the latest data. Continuing claims for the May 2 week soared 202,000 to 6.560 million, the 17th straight rise and yet another record. The unemployment rate for insured workers rose another tenth to 4.9 percent, pointing to a further increase in the overall unemployment rate which stood at 8.9 percent in April. There was very little initial reaction to this report, but it will not raise confidence in the stock market's big two-month rally.

Market Consensus Before Announcement
Initial jobless claims fell a sizable 34,000 in the May 2 week to 601,000 for the lowest rate since late January. The drop pulled down the four-week average by 14,750 to 623,500 for the lowest level since mid-February. But continuing claims rose for a fourteenth straight week, spiking 56,000 to a new record 6.351 million.

Definition
New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility.

http://www.bloomberg.com/markets/ecalendar/index.html

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#2) On May 14, 2009 at 1:27 PM, jegr5347 (< 20) wrote:

Could it be that the unemployment figures are a moving 4week average? Every time the tail end of the fouth weeks drops off and is replaced by a new week, the average is recalculated?

Just a thought. Notice how I use questions marks......before anyone jumps to bite my head off.

 

 

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#3) On May 14, 2009 at 1:47 PM, alstry (35.39) wrote:

jegr.....thanks for the try....but not a chance because it would be mathematically impossible that over 6.5 million would still be collecting benefits.  If not a single person got rehired for 6 months...the total would be less than 4 million.

SO MANY SCREAMING.....so few CAPs players hearing.....

With Los Angeles facing a $529-million budget deficit, Mayor Antonio Villaraigosa on Tuesday urged the City Council to declare a fiscal emergency that would grant him the authority to lay off and furlough thousands of city workers.

The request signals a more hard-line tack by the mayor to win salary and benefit concessions from the city's public employee unions, which had soured on Villaraigosa's call for a salary freeze, furloughs and increased benefit costs to save $230 million and avert the need for layoffs.

Villaraigosa said the worsening economy and an expected $300-million drop in city tax revenue gave him "very few options." L.A.'s budget gap is expected to grow to $1 billion in the 2010-2011 fiscal year because of investment losses in the city's pension systems, which the city is required to keep solvent.

"The gravity of the fiscal emergency that we face is enormous," Villaraigosa said in his letter to the council. "Unless we act with urgency, the city will face a cash flow crisis, raising the prospect of running out of cash between November and February."

As seen on Mish's blog....

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#4) On May 14, 2009 at 2:00 PM, anchak (99.85) wrote:

alstry...its not Weekly First Time claim....as per US Dept of Labor - its initial unemployment benefits - hence its not an

"Absorptional State" - as you said but is a "Transitional" one. Ie the same individual can be in and out many times - as they find temporary employment ( a lot of time thru the bureau) .

Continuing claims is a transitional one - but more reflective in the sense its a cumulative - longer period figure.

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#5) On May 14, 2009 at 2:14 PM, bridgeboy0 (31.11) wrote:

Anchak,

Don't use facts with Alstry.  You'll just confuse him.

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#6) On May 14, 2009 at 2:26 PM, alstry (35.39) wrote:

An,

Seriously...what percentage of the 6.5 million continuing claims are people that applied for benefits more than once in the past six months???

My guess is very low...but if you can find credible data...it would be appreciated.

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#7) On May 14, 2009 at 3:22 PM, anchak (99.85) wrote:

Alstry....As I said its continuing claims that's the problem....a 600k+ initial is VERY HIGH - if the continuing doesn't abate - even if weekly initial goes down a little bit ( which it should - till 4th of July - from which it will start creeping up , its a seasonal swing.) - this has some bad connotations for unemployment obviously.

Everythings so much tied to the reflation trade - otherwise god only knows what will happen. ( and please don't go on a tirade on this statement) 

 

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#8) On May 14, 2009 at 3:34 PM, alstry (35.39) wrote:

An,

It is the fact that continuing claims are RISING as we enter the period of the year where millions of seasonal workers traditionally go back to work is the ominous statistic....

Continuing claims should be falling despite the over 600K first time claims....why do you think I make such a BIG deal over this???

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#9) On May 14, 2009 at 3:37 PM, 4everlost (29.37) wrote:

Here is what made me think it was a weekly number:

Whitehouse defends job #

 

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#10) On May 14, 2009 at 3:47 PM, UKIAHED (36.08) wrote:

SO MANY SCREAMING.....so few CAPs players hearing.....

Maybe that is because the loudest voice in a room is a wisper.

Ed 

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#11) On May 14, 2009 at 3:51 PM, 4everlost (29.37) wrote:

Oops, conflicting info:

First time unemployment

"The number of U.S. workers filing first-time unemployment claims last week was 601,000, roughly 34,000 fewer than in the previous week, the Labor Department said Thursday.

However, continued unemployment still is increasing, with 6.35 million workers filing..."

Employment Situation Summary

"..THE EMPLOYMENT SITUATION: APRIL 2009

Nonfarm payroll employment continued to decline in April (-539,000), and the unemployment rate rose from 8.5 to 8.9 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Since the recession began in December 2007, 5.7 million jobs have been lost."

I find it tough torely on any of these #s.  I understand the difference between U3 and U6 and I don't think this can be explained by that anyway.

I'm just looking for the answer, don't get all crazy 'cause I asked a question.  I'm a supporter.

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#12) On May 14, 2009 at 3:55 PM, alstry (35.39) wrote:

4ever,

That article is contemplating the monthly U3 figures....something very different than the weekly first time claims.

Ed,

After our last exchange....it's good to still have you around;)

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#13) On May 14, 2009 at 4:52 PM, UKIAHED (36.08) wrote:

jegr.....thanks for the try....but not a chance because it would be mathematically impossible that over 6.5 million would still be collecting benefits.  If not a single person got rehired for 6 months...the total would be less than 4 million.

Actually Al – jegr is correct – the feds report on a 4 week moving average.  These are not “weekly” numbers.

The 4-week moving average was 630,500, an increase of 6,000 from the previous week's revised average of 624,500.

As far as why the math does not work out – you should not be using 6 months.  The actual number is closer to 9-10 months (depends upon the state).  An understandable mistake as the additional extension is only used in periods of high unemployment – and I think you and I would agree that we are in such a period. 

I get this information from

“Extended Benefits are available to workers who have exhausted regular unemployment insurance benefits during periods of high unemployment. The basic Extended Benefits program provides up to 13 additional weeks of benefits when a State is experiencing high unemployment. Some States have also enacted a voluntary program to pay up to 7 additional weeks (20 weeks maximum)”

A number I thought you would enjoy even more – it is a lot scarier than 6.5 million:

The number of unemployed persons increased by 563,000 to 13.7 million in April, and the unemployment rate rose to 8.9 percent.  Over the past 12 months,the number of unemployed persons has risen by 6.0 million, and the unemployment rate has grown by 3.9 percentage points.

This is not a U6 number – this is the honest to god unemployed – the difference between the 6.5 million and the 13.7 million are those who have exhausted all benefits and are still looking for any work…

Enjoy

Ed

 

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#14) On May 14, 2009 at 5:25 PM, alstry (35.39) wrote:

actually UKI....the four week moving average is the total of each week divided by four.....

it is the average amount of NEW FIRST TIME claims EACH week for the past four weeks

And as far as nine months...in order for continuing claims to go nine months....or even 10 months and EXCEED 6.5 million....not a single worker would be permitted to find replacement workd during that period to continue to receive benefits and the figure would still be light.  Again, nice effort though....again.

Finally, that which you so boldly highlighted is U3 and has little to do with first time claims and the issue in this blog

do you enjoy portraying yourself in this light so frequently?????

I myself would be a bit embarrassed....actually more than a bit based on the frequency.

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#15) On May 14, 2009 at 6:18 PM, UKIAHED (36.08) wrote:

actually UKI....the four week moving average is the total of each week divided by four.....

it is the average amount of NEW FIRST TIME claims EACH week for the past four weeks

Um - no.  Now I understand better why you are so confused.  Here is a good article on moving averages.  You are, however, close. 

It is actually the amount of NEW FIRST TIME claims for the prior 4 weeks added together.  It is moving because week 1 is removed and replaced by week 5.  This moving monthly (hence 4 week) "average" is used so that we get relevant monthly data each week.  To give us single week numbers would be less helpful as it would be thrown off by holiday weeks. 

I may not be explaining this in a way that you would understand - but consider - April job losses totaled 563,000 - The current 4 week moving average is 630,500.  Do you really think that we only lost 563,000 last month - but lost 630,500 last week?

So, 630,500 X 10 months = 6.3 million. Odd - I do not have trouble reconciling the math... 

there is always one or two blogger who seem to want to point out that the weekly numbers are really monthly numbers even though the government and press calls them weekly numbers.

Hmm - could be that we understand things that you do not. 

I myself would be a bit embarrassed....actually more than a bit based on the frequency.

Not a bit - I am here to teach - and to learn.  I take very little at face value - you may have noticed how many times I link my research - could be that I want everyone to review and challenge my efforts...?  I sure wish you would link items to back your claims - it would make them seem a bit more credible...

Thanks for your input -

Ed 

 

 +

 

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#16) On May 14, 2009 at 6:34 PM, alstry (35.39) wrote:

The number of U.S. workers filing first-time unemployment claims last week was 601,000, roughly 34,000 fewer than in the previous week, the Labor Department said Thursday.

http://www.washingtontimes.com/news/2009/may/07/first-time-unemployment-drops/

Some things simply left best alone.

You can thank 4ever for the link and enhanced crediblity.

Thanks again for being the poster child evidening why so many caps players need to go back to class and the thesis of this blog.

As far as averages....if you can't understand addition....how can I expect you to complete division.

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#17) On May 14, 2009 at 7:14 PM, UKIAHED (36.08) wrote:

 Some things simply left best alone.

 

And yet - I just cannot... :)

 

This a quote that you used in a prior blog: 

 Along with the reaction to the stress tests, the upbeat response to Friday's jobs report is evidence of our collective "disaster fatigue," says William Black, an Associate Professor of Economics and Law at the University of Missouri - Kansas City. "Every day is bringing a disaster. [539,000] jobs lost is a catastrophe but now we think ‘that's not so bad.'"

An optimist would say Black is missing the improving trend in the labor market: Although the unemployment rate rose to 8.9%, its highest level since 1983, April's 539,000 job loss was the smallest since October and compares favorably to March's decline of 699,000, February's 681,000 (both revised) and January's 741,000.

So - let me restate my question from a prior comment - your assursion is that Jan unemplyment was 741,000, Feb 681,000, Mar 699,000, Apr 539,000 and now each of the last 4 weeks averaged 601,000 job losses?

You are saying that we went from 539,000 in one month to 2,404,000 in the last 4 weeks? (should I point out that 2 of those 4 weeks were in April? - yes - I think I should)

I know you will not get this - that's OK.

It is funny to me that you predict:

For the past few weeks, Alstry has blogged if we keep up at this pace.....OVER 30,000,000 Americans will file for unemployment in 2009!!!!

and yet you say that: 

Seriously...what percentage of the 6.5 million continuing claims are people that applied for benefits more than once in the past six months???

No wonder you're scared - with only 6.5 million continuing claims so far this year and only 7 months to go to get to 30 million - yikes!

Well - enough for tonight - enjoy

Ed 

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#18) On May 14, 2009 at 10:47 PM, alstry (35.39) wrote:

Ed,

Thanks again for emphsizing how easily Fools can be fooled and why Alstrynomics is sooooo important and generally right.

You state:

So - let me restate my question from a prior comment - your assursion is that Jan unemplyment was 741,000, Feb 681,000, Mar 699,000, Apr 539,000 and now each of the last 4 weeks averaged 601,000 job losses?

You are saying that we went from 539,000 in one month to 2,404,000 in the last 4 weeks? (should I point out that 2 of those 4 weeks were in April? - yes - I think I should)

No Ed.....Alstry never made such an assertion.

Unemployment numbers are very very different than First Time Job claims.

The Government states that FIRST TIME JOBLESS CLAIMS totalled approximately 2.5 million people in each of the last four months or so......Alstry is only repeating the FIRST TIME JOBLESS CLAIMS.

The unemployment figure is a different number and different statistic than FIRST TIME JOBLESS CLAIMS.

Monthly unemployment counts the NET increase or decrease in unemployed people by adding in the most recent month and subtracting the last month.  So let's say, simply for illustration and not accuracy, that 2.5 million people lost their jobs in January, but only 2.0 million were unemployed in August....when you add January to the unemployment number and subtract August.....only 500K extra people are added to the unemployment rolls as 1.5 million are subtracted.

When you add 2 million a month for 8 months you get 16 million people....or about a 10% unemployment rate.....Hey what a coincidence......as the people who have been unemployed for over 8 months are counted as unemployed anymore....but let's keep it our secret.

Thanks again for supporting the Alstyrnomics cause for Truth, Justice and the American way.

 

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#19) On May 15, 2009 at 10:43 AM, UKIAHED (36.08) wrote:

Good Morning

 Monthly unemployment counts the NET increase or decrease in unemployed people by adding in the most recent month and subtracting the last month.  So let's say, simply for illustration and not accuracy, that 2.5 million people lost their jobs in January, but only 2.0 million were unemployed in August....when you add January to the unemployment number and subtract August.....only 500K extra people are added to the unemployment rolls as 1.5 million are subtracted.

 Whew - good.  I was afraid that I was mis-understanding the net change - made all the numbers not make sense to me.  I can rest easy now.  Don't get me wrong - I get that unemployment is way up.  But I'll not stress much over it until U3 gets to 15% - just my pain threshhold.

Thanks for the reply.

Have a great day.

Ed

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#20) On May 15, 2009 at 1:31 PM, alstry (35.39) wrote:

I simply can't understand why you don't think the people who got cut off the rolls in August but are still unemployed shoudn't be counted?

I guess it goes to character....some people like to live in reality and others...well I will leave that conclusion to you....it is your life and you are free to live it as you choose.

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