Relevant and even prescient commentary on news, politics and the economy.

Jobless claims highest in three months – but seasonality still playing a huge role

Jobless claims highest in three months – but seasonality still playing a huge role

On a unadjusted basis, new jobless claims rose by 231,335 to 1,151,015. Seasonally adjusted claims also rose by 181,000 to 965,000. The 4 week moving average rose by 18,250 to 834,250.

Here is the close up since the end of July (these numbers were in the range of 5 to 7 million at their worst in early April): 

There is now a 2+ month trend of YoY% increases in initial claims. Further, by rising to over 900,000, seasonally adjusted claims hit one of my two markers for a fundamental change of trend. But the 4 week average, which is still under 850,000, did not.

Scenes from the December jobs report

Scenes from the December jobs report

Friday’s December jobs report saw the first decline in employment since the lockdowns of March and April. Let’s take a closer look.
As I pointed out Friday, the losses were concentrated in the food and dining (restaurant) and amusement and recreation sectors, both of which are shown below normalized to 100 as of February:



The two sectors are down 20% and 30% from their February peaks.
By contrast, the leading job sectors of manufacturing, residential and overall construction, and temporary help positions all continued with gains, and are close to if not completely recovered from their pandemic losses. Below I show these YoY in two time periods for easier comparison (note two of the series did not begin until the 1980s).
1955-1982:

Programming note

by New Deal democrat

Programming note

 

Four year ago I wrote a valedictory piece about the Obama Administration, and separately wrote of my fears of what the Trump Administration would wreak.


Needless to say, especially in light of events of the past week, I intend to do the same retrospective as to Trump and the current state of the GOP and the Republic. Much of what I have to say is in agreement with disparate threads I have read on Twitter, but I want to weave those strands together into one cohesive piece. Hint: I keep thinking about old episodes of Supernanny, where a toddler’s behavior was allowed to get worse and worse without consequence. The longer it went on, the more forceful and resolute the parents’ response ultimately had to be

November JOLTS report shows the renewed impact of the pandemic, partial lockdowns

November JOLTS report shows the renewed impact of the pandemic, partial lockdowns

This morning’s JOLTS report for November (remember – a month in which there were total job gains) showed a jobs market recovery that at least paused due to the increasing effects of the out of control pandemic. Hires were up (good), while quits were unchanged, openings declined (bad) and layoffs and discharges rose (bad).

While the JOLTS data is a deep dive into the dynamics of the labor market, since it only dates from 2001, there are only 2 previous recoveries with which to compare the present. Nevertheless it is worthwhile to make the comparison.

In the two past recoveries:

  • first, layoffs declined
  • second, hiring rose
  • third, job openings rose and voluntary quits increased, close to simultaneously

Let’s examine each of those in turn. In each case, I break out 2001-19 in a first graph and then this year in a second.

December jobs report:

December jobs report: I told you so – jobs actually declined in December, BUT employment primed for takeoff once pandemic abates

Important: There was a huge amount of seasonality in this report. This is common for December, but the issue was greatly exacerbated because of the outsized impact of the pandemic. Take the large changes in some of the data with many grains of salt.


I have been warning for almost 4 weeks that the December employment report might have a negative number. It did. At the same time, the internals are not nearly so bad as the headline.

November construction spending confirms building surge

November construction spending confirms building surge

One of my consistent themes in the past few months has been how the housing market is priming the economy for strong growth in 2021 as soon as the pandemic is brought under control. In that vein, November construction spending surged, confirming what we have already been seeing in housing permits and starts.


First of all, here are both total and residential construction spending for the past 15+ years:



Note that in raw, non-inflation-adjusted terms, both are close to their all-time highs, and definitely at 10+ year highs.

Coronavirus dashboard for January 6, 2021: new infections vastly outpacing vaccinations

Coronavirus dashboard for January 6, 2021: new infections vastly outpacing vaccinations

Total confirmed COVID-19 infections: 21,046,195*

Infections last 7 days average: 219,253


Total deaths: 357,258

Deaths last 7 days average: 2,670

Total vaccinations: 4,836,489

*A study just released, based on random blood samples, suggests that as many as 50,000,000 Americans may have already been infected. Because some of the positive tests may be based on exposure to other coronaviruses, I do not think the number is that high. But my own guess is that the “true” number might be about 30,000,000, or 1 in every 11 Americans.


Today I want to focus on comparing this winter’s breakout with last spring’s and summer’s, by comparing the top and bottom 25 States with the “poster children” for each of the past breakouts.


Seven day average of new infectionsBottom 25

Top 25

Not only do *all* of the top 25 now exceed the infection rate of the 2 poster children for the previous breakouts, but many of the bottom 25 are in the same ballpark as well. Among the 50 States, only Vermont and Hawaii have some semblance of control.

November construction spending confirms building surge

November construction spending confirms building surge

One of my consistent themes in the past few months has been how the housing market is priming the economy for strong growth in 2021 as soon as the pandemic is brought under control. In that vein, November construction spending surged, confirming what we have already been seeing in housing permits and starts.


First of all, here are both total and residential construction spending for the past 15+ years:



Note that in raw, non-inflation-adjusted terms, both are close to their all-time highs, and definitely at 10+ year highs.

Weekly Indicators for December 28 – January 1 at Seeking Alpha

Weekly Indicators for December 28 – January 1 at Seeking Alpha

 – by New Deal democrat

My Weekly Indicators post is up at Seeking Alpha.

In a sparse data environment, it continues to stand out how surprisingly well – under the circumstances – the economy is doing, and how primed it is to really take off once the pandemic is brought under control.

As usual, clicking over and reading brings you up to the virtual moment, and puts a penny or two in my pocket.

Final jobless claims of 2020 continue to show a lack of progress

Final jobless claims of 2020 continue to show a lack of progress

New jobless claims declined for the second week in a row this week, but are still significantly above their recent pandemic lows, while continuing claims, seasonally adjusted, once again made a new pandemic low. There is a sizable but by no means certain likelihood that December’s jobs number will be negative.

On a unadjusted basis, new jobless claims declined by 31,736 to 841,111. Seasonally adjusted claims also declined by 19,000 to 787,000. The 4 week moving average, however, rose again by 17,750 to 836,750. All of these are above their recent lows. 

Here is the close up since the end of July (for comparison, remember that these numbers were in the range of 5 to 7 million at their worst in early April):