Jobless claims "Plunge"

Their words, not mine:

http://money.cnn.com/2003/11/06/news/economy/jobless/index.htm

Jobless claims plunge

New claims for unemployment benefits fall to lowest level since January 2001, trouncing forecasts.
November 6, 2003: 9:13 AM EST



NEW YORK (CNN/Money) - Jobless claims plunged in the United States last week to their lowest level since January 2001, the government said Thursday, as the labor market continued its recovery from a long slump.

The Labor Department said 348,000 people filed new claims for unemployment benefits in the week ended Nov. 1, compared with a revised reading of 391,000 in the prior week.


It was the lowest number of weekly jobless claims since 339,000 in the week of Jan. 20, 2001. Economists, on average, expected 380,000 new claims, according to Briefing.com.

A spokesman for the Labor Department told Reuters there was no apparent explanation for the enormous drop in claims, but suggested at least some of that drop should be discounted.

"Every week we encourage (people to look at) the four-week average. This is certainly one of those weeks," the spokesman said.

The four-week moving average of new claims, which irons out the volatility of the weekly data, fell to 380,000 in the week ended Nov. 1 from a revised 390,000 in the prior week.

Still, the dramatic one-week drop was perhaps the clearest indication yet that the labor market, which has been mired in its longest slump since World War II, may finally be creating jobs.

"This big decline may seem a little on the aberrant side, and we have to be careful about it, but at least some of it has to be real," said Anthony Chan, chief economist at Banc One Investment Advisors.

U.S. stock market futures were mixed after the report, pointing to a mixed opening on Wall Street. Treasury bond prices fell.

New claims had fluctuated in a narrow range near the 400,000 mark since mid-July. Most economists consider new claims below the 400,000 threshold as a sign of a recovery. Last week was the fifth consecutive week of jobless claims below that level and perhaps the clearest sign yet that the labor recovery is on the mend.

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In the report, continued claims, the number of people out of work for a week or more, dipped to 3.51 million for the week ended Oct. 25, the latest data available, from a revised 3.53 million the prior week.

On Friday, the Labor Department reports on October's unemployment rate and the growth of non-farm payrolls. Economists, on average, expect unemployment to remain at 6.1 percent and for 65,000 new jobs to be added to payrolls, according to Briefing.com.

Most economists believe payrolls need to grow by about 150,000 jobs per month in order to keep up with the natural growth of the labor force and keep unemployment from rising.

Last week's rate of jobless claims, if sustained, would be consistent with 150,000 new jobs a month, according to Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd., but the economy is probably not quite there yet.

"We doubt October data will be that strong, but it will not be long," Shepherdson said. "The final element of the recovery is falling into place."

A short snippet from CBS news indicates that US job losses continue.

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http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=37929.4167939815-809414361&siteID=mktw&scid=0&doctype=806&

10:00am 11/04/03

U.S. October layoffs surge 125%, Challenger says By Rex Nutting
WASHINGTON (CBS.MW) -- Layoff announcements from U.S. companies more
than doubled in October to 171,874, the highest in a year, according to
the monthly tally released Tuesday by outplacement firm Challenger Gray
& Christmas. October is typically the largest month for layoff notices,
as companies slash costs at the end of the fiscal year. The Challenger
survey is not adjusted for seasonal factors. Layoff announcements had
fallen for three months in a row before October's 125 percent increase.
In October, the auto industry sacked 28,363 workers, followed by 21,169
in the retail sector. Telecommunications companies cut 21,030. So far in
2003, 1.04 million job reductions have been announced.

with no explanation...

They do this. Blare the "good news" and then revise it, but they don't make a big deal out of the revision as far as bringing it to anyone's attention. It's been going on like this since, well, forever. But especially with number 41 and number 43.

Anyway, a job at minimum wage doesn't quite make up for losing a job at a hundred grand a year, does it?

The X-mas season and other "annual" events are factored into these numbers when the DOL calculates them. What is not factored in is how much retailers et. al. are planning on expanding staff for the holiday vs. last year. For example, over the last couple of x-mas holidays sales have been poor so retailers haven't hired as much, but the "rumor" is that this is going to be a good year. So retailers are adding more than they did last year. That growth (year over year) is being picked up in these numbers not the annual growth.

For example, a cheese company adds employees this time of year, every year to pack gift baskets. Last year they hired 20 extra people for the holidays, as the did the year before that. This year they hired 30 extra for the same time period. DOL will show only 10 additional workers hired in this example.

I hope this makes some sense to you all.

just yesterday my partner's company had a wonderful round of layoffs...people with 10+ years of service!
corporate America is screwing Americans and I'm terrified that the jobless numbers that come out on Fri will massaged to the point where the job outlook is rosy. The outlook is not rosy from where I'm sitting.

AND ONLY 50,000 LESS NEWLY UNEMPLOYED?!?
this is a plunge? looks more like a minor dip to me.

i.e. people who have stopped looking, increase in disability and early ss claims, prison population -- the official u.s. unemployment count is always way skewed. hard to make a lot out of it.

October Layoff Annoucements numbered over 170,000---the highest in a year. The actual layoffs will probably happen before the end of 2003.

jobs that pay under 20 k a year really count? That is working poverty. The jobs being created are seasonal and low IQ type work. These are not meaningful long-term employment prospects.

So when your 80K job goes to India and you wind up as a Wal-Mart greeter then you are now employed!