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

Jobless claims break on through – 1M+ jobs report for April looks likely

Jobless claims break on through – 1M+ jobs report for April looks likely

As I have said for the past few weeks, new jobless claims are likely to the most important weekly economic data for the next 3 to 6 months. With the number of those vaccinated continuing to increase, I have been expecting a big increase in renewed consumer and social activities, with a concomitant gain in monthly employment gains – as we saw in the March jobs report.Four weeks ago I set a few objective targets: new claims to be under 500,000 by Memorial Day, and below 400,000 by Labor Day. 
This week was a major advance towards those targets.


On a unadjusted basis, new jobless claims declined by 152,833 to 612,919. Seasonally adjusted claims declined by 193,000 to 576,000 (with last week’s number being adjusted upward by 25,000). The 4 week average of claims also declined by 42,250 to 683,000. 

Here is the close up since last August (recall that these numbers were in the range of 5 to 7 million at their worst in April of last year): 

Wealth distribution in the US continues to be a first order economic issue

Wealth distribution in the US continues to be a first order economic issue

Tomorrow (Thursday) is one of those days when just about Every Economic Statistic in the World will be released. In the meantime, no new data today.

So, while we wait, let me send you over to this article by Wolf Richter analyzing the distribution of wealth and assets in the US updated by the Fed through the end of last year.

Unsurprisingly, the rich have gotten richer, and their preferred asset classes are the most protected by the tax code.

Just one of many first-order economic problems in the US. Wealth, once entrenched – most particularly when it is unearned and inherited – will never be voluntarily disgorged. The beneficiaries would rather give up democracy, give up the Rule of Law, rather than see their privileged status compromised.

Real wages decline, but real aggregate wages increase

Monthly consumer inflation rate increases by most in 10 years; real wages decline, but real aggregate wages increase

 – by New Deal democratSeasonally adjusted consumer prices rose 0.6% in March. This was the biggest single month gain since June 2009, coming out of the Great Recession:



Leaving aside the pandemic, since the 1980s recessions have only happened when CPI less energy costs (red) had risen to close to or over 3%/year, usually driven by increases in the price of oil by more than 40% YoY. Even with this month’s spike, YoY inflation ex-energy is only up 1.9%:

Jobless claims: progress pauses, as a new surge in COVID in Michigan and the Northeast causes concern

Jobless claims: progress pauses, as a new surge in COVID in Michigan and the Northeast causes concern

New jobless claims are likely to the most important weekly economic data for the next 3 to 6 months. As the number of those vaccinated continues to increase, I expect a big increase in renewed consumer and social activities, with a concomitant gain in monthly employment gains – as we saw in the March jobs report last week.Three weeks ago I set a few objective targets: I am looking for new claims to be under 500,000 by Memorial Day, and below 400,000 by Labor Day. This week didn’t help us, although it is more of a pause than a significant increase.


On a unadjusted basis, new jobless claims rose by 18,172 to 740,787. Seasonally adjusted claims rose by 16,000 to 744,000. The 4 week average of claims also rose by 2,000 from last week’s pandemic low of 721,250 to 723,250. 

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

With a Booming economy comes at least transitory inflation

With a Booming economy comes at least transitory inflation: March producer prices

One of the economic subjects you are going to hear a lot about this year is inflation. We are recovering from a sharp if brief recession, and with the dual firehoses of fiscal and monetary stimulus, entering a Boom such as we have probably not seen in over 50 years.


Unsurprisingly supplies of commodities and goods that had been cut back during the recession are going to be stretched thin and much competed for now, generating at least a brief burst of inflation.


With that background noted, this morning producer prices for March were reported up 1.3% for that month alone. YoY producer prices are up 6.0% (blue in the graphs below):

Pandemic still in control

February JOLTS report showed a pandemic still in control

Yesterday morning’s JOLTS report for February showed that the pandemic was still in control of the numbers.
This report has only a 20 year history, and so includes only two prior recoveries. In those recoveries: 

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

The recovery from the worst of the pandemic almost one year ago at first followed this script, but the winter surge, which led to a few month of flat, or worse, jobs reports, disrupted that trend.


Layoffs have followed the above script, reverting to normal levels back in last May, and continuing at those levels since:

Coronavirus dashboard for April 5: the problematic cases of Chile . . . and Michigan

Coronavirus dashboard for April 5: the problematic cases of Chile . . . and Michigan

As you probably already know, the news on the vaccination front continues to be good, as the US is now administering on average over 3 million doses a day – and still climbing. At this rate of improvement, every adult in the US could be vaccinated by Memorial Day at the end of next month.


One bit of not so good news is that the percentage of seniors who have received at least one dose has almost stalled out at roughly 75%. For example, yesterday that percentage improved by exactly 0.1%. If 1/4 of even the most vulnerable population simply refuses to be vaccinated, we are not going to achieve herd immunity.


Further, while in the past few weeks I have been highlighting the success stories in vaccination, particularly in Israel and the UK, there are a number of counter-examples that I want to examine today.

First of all, Chile. Chile has administered even more doses per capita than the US, equivalent to about 55% of its population vs. 50% for the US. And yet both cases, and with about a 4-week delay, deaths, have both risen about 50% from the date that vaccinations started to be administered:

I bookmarked a prediction about the coronavirus by supply-sider Scott Grannis one year ago …

I bookmarked a prediction about the coronavirus by supply-sider Scott Grannis one year ago …

 As I mention from time to time, I read a number of economic observers with whose opinions I usually strongly disagree, partly because it is good to consider other points of view, and partly because some compile excellent and interesting data, even if I disagree with their conclusions about what the data means.


The “Calafia Beach Pundit,” Scott Grannis, is one of those writers. His chart work is frequently compelling and often challenging. But, when it comes to the ideologically inspired response to COVID-19, he has been out of his mind.


So almost exactly one year ago, on March 27, 2020, I bookmarked one of his observations and forecasts, because I expected that the truth would be very different than he thought: 

American plutocracy in two simple graphs; plus, when will wage growth bottom?

American plutocracy in two simple graphs; plus, when will wage growth bottom?

The JOLTS report for February comes out later this morning; I may post on it later or tomorrow.


In the meantime, here are updates on several graphs I used to run during the last expansion in order to examine how shared out (or not) economic growth was.


First, here is a graph comparing corporate profits adjusted for inflation, and total nonsupervisory wages, also adjusted for inflation. Both are also adjusted for population growth, so that we can see how much each has grown (or not) per person: