US jobless claims rise to 898,000 with layoffs still high - by C. Rugaber

The number of Americans seeking unemployment benefits rose last week by the most in two months, to 898,000, a historically high number and evidence that layoffs remain a hindrance to the economy’s recovery from the pandemic recession.

Thursday’s report from the Labor Department coincides with other recent data that have signaled a slowdown in hiring. The economy is still roughly 10.7 million jobs short of recovering all the 22 million jobs that were lost when the pandemic struck in early spring.

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US jobless claims rise to 898,000 with layoffs still high

US Economy: Jobless rate is worse than you think - by Heidi Shierholz

On Labor Day, the US celebrated the American worker. And more than four years since the Great Recession ended in June 2009, the unemployment rate is 7.4%, a big improvement from the high of 10% in the fall of 2009. Unfortunately, the rate is hugely misleading: Most of that improvement was for all the wrong reasons.

Remember, jobless workers are not counted as being part of the labor force unless they are actively looking for work, and the decline in the unemployment rate since its peak has mostly been the result of workers dropping out of -- or not entering -- the labor force.

According to Congressional Budget Office estimates, if the labor market were healthy, the labor force would number about 159.2 million. But the actual labor force numbers just 155.8 million. That means about 3.4 million "missing workers" are out there -- jobless people who would be in the labor force if job opportunities were strong.

Given the weak labor market, they're not actively looking for work and so aren't counted. If those missing workers were actively looking, the unemployment rate would be 9.4%.

Read more: Opinion: Jobless rate is worse than you think - CNN.com

US Economy: Why The U.S. Economy Isn't Growing While Stocks Soar - by Charles Biderman

The Bureau of Labor Statistics guessed that 236,000 jobs were added in February and everybody applauded. Yay, or should we say, “boo.”

What most everyone missed is that even the BLS admits in a footnote to its February jobs press release that historically its initial number can be revised as much as 90 percent. A 90 percent revision to me means that the February 230,000 job number is meaningless.

On the other hand, TrimTabs has been estimating about 100,000 new February jobs. Our estimate historically has varied less than 10 percent from the final, revised BLS jobs number. The real numbers for this February will not be reported until March 2014. In other words, like most of what the U.S. government does, the monthly jobs number is a joke.

As I have been saying all year, the reality is that stocks have neared all time highs for just two reasons. The first, and most important, is that the Federal Reserve has been consistently debasing the currency by creating $4 billion of new money via computer keystrokes each and every day and some of that money has been increasing the demand for equities.

The second reason why stocks are so high is that companies have accumulated a huge cash hoard earning nothing sitting on balance sheets. That’s why companies are using some of that cash to shrink the number of shares outstanding.

So we have more money chasing fewer shares. The end result is that stock prices go up. So what if the U.S. economy isn’t growing? Remember, Las Vegas magicians do not use magic. They use misdirection to deceive the audience.

Misdirection is the name of the game at the Fed these days. In the past a rising stock market had some relationship to an improving economy. But not this time. This time it is all a charade.

Read more: Why The U.S. Economy Isn't Growing While Stocks Soar - Forbes

U.S. unemployment drops to 4-year low

Barack Obama

The U.S. unemployment rate fell to 7.8 per cent last month, dropping below 8 per cent for the first time in nearly four years. The rate declined because more people found work, a trend that could have an impact on undecided voters in the final month before the presidential election.

The Labor Department said Friday that employers added 114,000 jobs in September. The economy also created 86,000 more jobs in July and August than first estimated. Wages rose in September and more people started looking for work.

The revisions show employers added 146,000 jobs per month from July through September, up from 67,000 in the previous three months. The unemployment rate fell from 8.1 per cent in August, matching its level in January 2009 when President Barack Obama took office.

Read more: U.S. unemployment drops to 4-year low - Business - CBC News

Wall Street: Big drop tomorrow? Are stocks overvalued and overloved? - by Anthony Cherniawski

The number of unemployed persons decreased by 556,000 to 14.5 million in December, and the unemployment rate dropped to 9.4 percent. Over the year, these measures were down from 15.2 million and 9.9 percent, respectively. This is largely due to unemployed workers running out of benefits. It appears that these people are no longer counted in the labor force, leaving as many as 3.91 million unaccounted for and a real unemployment number closer to 11.7%. We must ask our lawmakers to make the BLS account for these people.

U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force rose from 16.3% in November to 16.6% in December.

The CES Birth/Death Model added 24,000 hypothetical jobs to the payroll numbers. This leaves only 79,000 probable new jobs created in the month of December. Remember, we need 150,000 to 200,000 new jobs just to maintain at the current employment level.


Wall Street: Margin debt - borrowing to buy stocks - has shot ahead of the S&P. It normally follows the index up and down. When margined stock gets ahead of the market, any significant drop is in danger of snowballing as stock is sold to cover the margin. Call it the old fashioned type of Flash Crash, of the sort we saw in 1929 when stock was bought with sub-prime margin (90% margin on 10% cash), or right after the Lehman debacle when TARP was pronounced. How the 'bots might handle that we may find out - technicians are all over themselves with expectations of a 5-7% drop as early as tomorrow.

For more: Are stocks overvalued and overloved? :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website