The Department of Labor has produced its estimate of the number of initial unemployment claims:
In the week ending July 10, the advance figure for seasonally adjusted initial claims was 429,000, a decrease of 29,000 from the previous week’s revised figure of 458,000. The 4-week moving average was 455,250, a decrease of 11,750 from the previous week’s revised average of 467,000.
The advance seasonally adjusted insured unemployment rate was 3.7 percent for the week ending July 3, an increase of 0.2 percentage point from the prior week’s revised rate of 3.5 percent.
The advance number for seasonally adjusted insured unemployment during the week ending July 3 was 4,681,000, an increase of 247,000 from the preceding week’s revised level of 4,434,000. The 4-week moving average was 4,581,250, an increase of 22,000 from the preceding week’s revised average of 4,559,250.
The fiscal year-to-date average of seasonally adjusted weekly insured unemployment, which corresponds to the appropriated AWIU trigger, was 5.056 million.
with some of the states in the most serious economic condition, e.g. Michigan, California, also showing the highest number of initial claims. New York (8,066), New Jersey (6,167), Michigan (5,323), and Illinois (3,034). While these are among the most populous states, it appears to my eye that their shares of the initial claims are disproportionate to their population size. A few of the other highly populous state, e.g. Florida (-3,586) and Pennsylvania (-1,047) show the largest declines. My assessment would be that overall we’re going in the right direction but not nearly fast enough.
Meanwhile, the Federal Reserve is reporting manufacturing utilization is, essentially, flat:
Industrial production edged up 0.1 percent in June after having risen 1.3 percent in May. The rate of change for March was revised up, and the rate of change for April was revised down; these revisions resulted primarily from the incorporation of new information on the output of utilities. For the second quarter as a whole, total industrial production increased at an annual rate of 6.6 percent. Manufacturing output moved down 0.4 percent in June after three months of gains at or near 1 percent. The output of mines rose 0.4 percent. The output of utilities increased 2.7 percent, as temperatures moved further above seasonal norms. At 92.5 percent of its 2007 average, total industrial production in June was 8.2 percent above its year-earlier level. The capacity utilization rate for total industry remained unchanged in June at 74.1 percent, a rate 5.9 percentage points above the rate from a year earlier but 6.5 percentage points below its average from 1972 to 2009.
As I’ve said before this is not the stuff of which a robust recovery is made and it doesn’t bode particularly well for an improvement in the employment situation in the near future.
Could someone please explain something to me? The Federal Reserve is projecting an annualized increase in GDP between 3.0 and 3.5 percent for 2010 while the growth figures reported for the first quarter of 2010 say that actual growth was about 2.7% on an annualized basis. How do you get from the BEA’s report of actual numbers to the Fed’s projections without much sharper growth than this over the rest of the year? Does that growth look likely?
Update
Henry Blodgett gives one possible interpretation of the discrepancy:
Something tells us that at the next meeting those forecasts will be revised down again.
Some discussion I heard this A.M. on CNBC was that the Fed’s estimates of the effects of it’s own stimulative monetary policy have not met expectations because the models are based upon an economy more responsive to low interest rates. Specifically, the sectors of the economy most responsive to low interest rates, such as construction and autos, as well as banks in general, are still reeling. Following this logic, if we get to a “new normal” in these sectors (no longer retracting, also looking beyond time-shifting stunts), then more robust growth is possible.
PD –
I’m very sympathetic to the notion that the Fed is operating on notions of how prior rebounds have evolved, and has failed to incorporate the concept or need to first get to equilibrium, or the “new normal.”
That said, we still have to deal with “electromotive force,” the fact that stock and housing bubbles have drained a tremendous amount of wealth, and tax increases may drain yet more. There is no driver. It almost becomes circular: no wealth, no income growth, no wealth build, no income growth.
Meanwhile there is this giant vacuum cleaner called government pulling yet more resources from the private sector. Its getting very Japanese around here.
PD –
I don’t know who this guy is, but I could have written this. Its seems apropos.
http://www.zerohedge.com/article/how-start-economic-recovery
That guy believes, to borrow a phrase, in magic ponies. What large international bank has ever gone through BK proceedings? Whose laws prevail? How would this affect international relations while we are in two wars? If we had a structure to do this, then he would have a better case.
Steve
steve, I don’t believe he’s talking about the “too big to fail” banks, he’s talking about the local and regional lenders that aren’t loaning to small business, who lack “access to the big money center banks or the Fed’s discount window.”
I’ve never seen a magic pony, but I had a girlfriend in college who used to tell me……well, never mind.