economic forensics

once i realized somewhere around the month of may that the controversy over whether or not employment situation in the united states was improving was moot, i stopped following the data as closely, turning instead to the task of licking my own (un)employment situation. i'm surprised to learn that many months later there are still some lonely--but loud--voices who are busy hawking rose-colored glasses with every BLS report. there's been some talk, for instance, of the fact that continuing claims on unemployment insurance fell by 88,000 in the first two weeks of july, and that new claims fell by 95,000 during the same period. zero hedge has a good counter-argument to this talk, and though not my own hard-hitting investigative journalism, still i thought i'd deliver what we've all come to know and love here at the chorography: a stale paraphrasing stuffed with my own glaring bias and stomach-turning vitriol.

to the second assertion, that concerning new claims, zero hedge posits BLS number-fudging. i've pointed out several times in the past occasions where very suspicious moves were made on the bureau's part when faced with abysmal data. seasonal adjustment is this time the culprit; zero hedge says that non-seasonally adjusted figures show a 108,000-claim increase over the past two weeks. their evidence for tampering, or at least for a very inappropriate burst of forecasting elan, is drawn from a comparison with the same period (july 1st-15th) last year. it turns out that a non-seasonally adjusted decrease of 115,000 claims fell to 19,000 when seasonally adjusted. there does seem to be a discrepancy in the way the numbers were treated between the two years. i noted, in an earlier post, a similar difference between the firm birth/death adjustment for april made last year and that made this year, the difference being that this april firm birth was much stronger than the year before. given the lousy performance of just about every economic indicator on god's green earth then and now, this seemed a bold claim to make. still, it is no less a claim that zero hedge is making, and so until the BLS confesses to being freemasons or international zionist-bolsheviks, on this point ambiguity will continue to reign.

on the subject of continuing claims, however, the picture is clearer. that drop of 88,000 seems great, until you sit it next to the 170,000-claim increase in the emergency claims and extended benefits program. what the drop in continuing claims really means is that for a huge number of americans, unemployment insurance is beginning to run out. the emergency programs are meant to pad the amount of time one can be succored by the federal government. zero hedge says that the benefit exhaustion rate has hit 50%. that means that millions are now going to be pushed into these emergency programs, which can, by their very nature, only provide short-term relief. the question is what, if anything, the federal government will do. with new claims still accelerating (despite questions over a possible slowdown), it's likely that the system is going to be severely strained as the year wears on. i remember reading in this times article--from there came the inspiration for my last post, on the fuckotry that is the state of california--that sixteen states were already borrowing to pay unemployment, their funds having dried up through inattention and asinine mismanagement. the times predicted that the number of delinquent states was also expected to grow, and, given what i've said so far, why not? with so many people moving into emergency programs, it's clear that the unemployment picture for most workers is frighteningly long-term. the states will be expected to shell out for some time to come, then.

california, by the way, is one of the states that is blowing credit markets like the dickens to feed its unemployment habit. u6 (unemployment and underemployment) is also 20% there. i don't know what else to say except that, frankly, sir, i am shocked and appalled.