Free Markets, Free People

At what point does the media drop “unexpectedly” from its unemployment stories?

I mean, for heaven sake, it seems that weekly the “experts” are surprised by an “unexpected rise” in unemployment statistics.  This week was no different than the “unexpected rise” last week:

Unemployment claims filed last week rose unexpectedly, coming in at 496,000, up 22,000 from the previous week.

Taken with other discouraging news released this week — record-low January new home sales and a slide in consumer confidence — the new jobless claims number describes a slow and uncertain recovery.

Forecasters had expected 460,000 new jobless claims to be filed last week

The four-week moving average of new jobless claims — which smooths out volatility in the week-to-week numbers — rose 6,000 to 473,750.

Key phrase – “slow and uncertain recovery”. So a continued “rise” in unemployment, even to this weeks actual numbers, shouldn’t be “unexpected” in such a recovery. Why it is so important to predict what the next week’s unemployment stats will be anyway? As often as they’ve been wrong and seen “unexpected” numbers you have to wonder why they even bother. More significantly, given the track record, you have to wonder why the media even bothers with their numbers. The numbers are what they are. From those numbers we should be able to understand the condition of the economy. But I’m tired of seeing “unexpected” numbers every week treated as some sort of surprise by a group whose credibility was shot a long time ago.



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24 Responses to At what point does the media drop “unexpectedly” from its unemployment stories?

  • At what point does the media drop “unexpectedly” from its unemployment stories?

    That’s easy – when the Democrats are no longer in charge.

    • Then the editors do a search and replace, with “unexpectedly” being replace “inexorably, due to the failed policies of X”

  • Why?  Because like a collection of wino’s living from day to day for their next bottle of MadDog 20/20 these guys are living week to week hoping that somehow the tried and failed methods this administration has used will suddenly morph into economic magic that starts a climb out of this disaster.  Joe Biden is probably hoping the Germans will bomb Pearl Harbor again to pull us all together just like in his grandpa’s day.
    However, as long as Obozo continues to place emphasis on fixing health care, and continues with plans to let the EPA have their way with us in lieu of Crap and Tax the ‘nothing’ will continue and we’ll have to rely on plain people eventually coming out of the funk to get us back on the road to recovery.

    • Frankly I don’t think Obama has any useful ideas anyway, because he’s in over his head.  We’re going to have to do this without the President to lead us.

      • We really don’t need the president at all. Most recesssions just need time to finish. Sure, the Fed can goose as much as they can, but its usually time that sorts things out.

        • The stimulus funds have given us economic growth — 5.9% in the last quarter (revised up today from 5.7%).  Jobs are a lagging indicator, but job loses peaked in January 2009 and if the trend continues job growth should start by summer.   The real problem is cultural — we got addicted to a “something for nothing” economy, ranging from those living off government to so-called capitalists who thought making money was easy — just invest in what’s hot, flip properties and the like, and the money would come rolling in.  The bubble mindset allowed the US to let production slide and a huge current account deficit emerge.   Changing those structural problems will take time, and of course the President alone can’t do it.

          • That 5.9% is unsustainable.  Here’s something you should read:

            WASHINGTON (AP) — The economy boomed at the end of 2009, growing at the fastest rate in more than six years. Now if only it could keep it up.

            The economy expanded at an annual rate of 5.7 percent in the fourth quarter, the second straight quarter of growth. But analysts warn it’s unsustainable.
            Consumer spending, chilled by double-digit unemployment and scant wage gains, remains weak. And the benefits of government aid and higher company output to feed stockpiles will dwindle.
            Many analysts predict gross domestic product will expand at a rate closer to 2.5 to 3 percent in the current quarter and 2.5 percent or less for the year.
            That won’t be enough to significantly reduce the unemployment rate, now 10 percent. In fact, most analysts expect the rate to keep rising for months and to remain close to 10 percent through year’s end.
            To drive down the jobless rate by just 1 percentage point this year, the economy would have to grow by 5 percent for the whole year. No one thinks that will happen.
            Until companies step up hiring and raise pay, consumers will feel squeezed. For all of last year, workers’ compensation rose by the smallest amount on records going back more than a quarter-century.
            “Consumers are walking, not running,” said Ken Mayland, president of ClearView Economics.
            Roughly two-thirds of the quarter’s growth came from increased manufacturing as businesses drew down their stockpiles of goods at a slower rate. But companies will eventually let those inventories fall again unless consumers — who account for about 70 percent of the economy — spend more.

            The 5.9% growth was due mostly to companies beefing up their inventories.  But unless consumer spending recovers, we won’t see anything close to this growth rate for the remainder of the year.  The stimulus may or may not have had anything to do with the inventory peak, so it’s a bit of a stretch to claim it did.  Unless, of course, you are just cheerleading.

          • There’s no causal relationship between the stimulus and the uptick in GDP last quarter. Businesses were replenishing their depleted inventories. Had nothing to do with stimulus money, which appears to have disappeared into various bureaucratic eddies.

            Did you get some, Scott?

          • “The stimulus funds have given us economic growth — 5.9% in the last quarter (revised up today from 5.7%).  Jobs are a lagging indicator, but job loses peaked in January 2009 and if the trend continues job growth should start by summer.  ”
            My god you’re entertaining, you’ve missed your calling, you need to be part of this administration.   If you had a TV program we could call you “Farmington Frank” and could get Baghdad Bob to do guest co-anchoring with you.

          • No, no, no Scott.  The report today indicated that 3.9% of the growth was inventory restocking, but we know that final sales only ticked up.  So, this restocking portion of GDP will go back to about zero next quarter.   Econoday inserted this line:
            “Markets should focus on the downward revision to final sales and this should weigh on equities and help interest rates ease.
            In other words, this revision was not good at all.  Combine that with the (unexpected) 7.1% decline in sales of existing housing (following the decline in housing start) and this economy is still in deep trouble.  The consumer is not about to spend money on anything besides necessities while at the same time paying down debt.  One of the Fed  governors yesterday said it would be years before we get back to the 2007 levels of production.
            Your analysis is also faulty in the sense the current account deficit grew because we were borrowing and then spending.  It was the debt that has caused the problem, not a lack of production.  We are still the largest manufacturer in the world.  But, we manufacture high tech, high productivity stuff like airplanes and farm equipment, not high labor textiles.

          • Restocking inventories may also have tax benefits, thus the rush to do so before the year ended.

          • Oh!  SNAP.
            Stuart Hoffman, chief economist at PNC Financial Services Group, called the year-end growth spurt “a one-hit wonder.””
            “The signs aren’t hopeful. Consumer confidence took an unexpected dive in February, and unemployment stands at 9.7 percent.”
            “Sales of previously occupied homes fell sharply in January for the second straight month, to their lowest point since summer. The results were far worse than forecast.”
            Read it, not all bad news, some positive signs.    How incredibly ironic, or is it moronic, for you to tell us our cultural problem is we got addicted to something for nothing here, and then tell everyone you think health care is a “right” on another post.

        • True, but it would be nice to have a leader, you know – kind of a gee whiz it’s Morning in America guy?  Because what we need is encouragement and belief that things are going to get better.
          What we’re getting is more episodes of the Obozo show.

          • The economy has been growing.   The level is unsustainable, but this is how recessions end.  This is what happened in 1982-83 (remember Reagan at 38% approval and looking dead for 1984).   First the economy perks up, then jobs come.  Now, some believe the jobs won’t come this time.   But I have a sneaking suspicion that the predictions of Obama being a failure will go the same way the even more widespread consideration of Reagan as a failure in his first two years went away.    But looker, you’re showing ignorance of economics by dismissing a description of the normal course of a recession as “Baghdad Bob.”  Enjoy this bit of times, just as the Democrats enjoyed Reagan’s problems in 1982.

          • No Scott, I’m describing YOU as Baghdad Bob, well, in your case, Farmington Frank.

  • “Unless, of course, you are just cheerleading.”
    Anarcho-syndicalist political science professors from UM Farmington would never do that.

  • Restocking inventories is the start of pulling out of a recession.   Durable goods orders are up.  The current account deficit is far down from its unsustainable peaks.   The dollar has gained value.   Look, you guys may want the economy to stay bad, it appears that way the way you try to rationalize ignoring or dismissing any good news.
    Yes, there is a problem with debt.   Yes, deficits need to be cut.  Yes, structural change is necessary.   Ultimately, getting the economy moving and jobs created is only the first step in Obama’s task (with Congress and hopefully both parties) to fix an economy driven into harsh imbalances by 2008.  Recall that job loses peaked January2009 and since then there has been a year of steady improvement, to the point job creation is expected soon.   So yes, problems remain — but to try to deny all improvements out of what appears to be a widespread case of ODS (just apply everything you all mocked the left with on BDS to yourselves now) makes no sense either.

    • I notice that the stimulus disappeared from this response, Scott.

      No one doesn’t want the economy to recover. The economy will either come around or it won’t, and the stimulus has nothing to do with it.

      In fact, the stimulus has not helped. It didn’t restock inventories, but it did hog capital away from private borrowing and investment. It was a political payoff, and that’s all it was ever meant to be.

      • But if the Stimulus didn’t work, then the ‘messiah’s’ plan isn’t working….and that…that…..ahhhhhhhhhhhh… even think that is a sign of ODS, I decree it!

        • Of course the stimulus has worked, look at economic growth.   That’s not even controversial, the stimulus has caused economic growth.   I can’t believe you’d question that.

          • Ladies and gentleman, I give you today’s example of a post hoc fallacy combined with begging the question.
            The stimulus worked because there was economic growth.  There was economic growth because the stimulus worked.

    • Restocking is only a sign of the recession ending if businesses are selling that inventory.  As I mentioned before, final sales are not lifting.  Hence, the restocking will stop.  Look more carefully at the durables.  “capital goods new orders ex defense and aircraft came in at -2.9%.”. In other words, the consumer durables are falling off, not increasing.  Existing home sales were down 7.1%.  The dollar is up, but it is because of Europe, particularly Greece.  In fact, the dollar dropped today after the rumor there was a bailout for Greece in the works.
      No Scott, there have not been job improvements.  We are only losing jobs at a smaller rate.   That is not much of an improvement.  The consumer is neither spending nor borrowing.  Many of those lost jobs will never be coming back.   It is hard to see where job growth will come from.   Perhaps you have a suggestion.

      • Well, we’ll see.  I think you’re looking for bad news and ignoring positive signs.  Within a year or two, we’ll know for sure.

        • Well, it is pretty easy to find bad news.  It hardly takes any looking.   You just have to look beyond the headline number to the actual data.
          Did you notice in the 5PM Friday data dump that Fannie now says it needs an additional $15.3 billion of taxpayer funding?  Somehow, they managed to find $1 billion of their own money to go against the $16.3 billion loss.  That bring the 2009 loss to $72 billion and taxpayer funding of $127 billion with no end in sight.   That ties in nicely with the late Christmas Eve announcement of unlimited taxpayer funding for Fannie and Freddie.
          I will also point you to some AIG footnotes in the 10Q.  Not only is there some concern that AIG will not be able to continue as a “going concern”, there is this: “A total of $150.0 billion in net notional amount of the super senior credit default swap (CDS) portfolio of AIGFP as of December 31, 2009, represented derivatives written for financial institutions, principally in Europe, which AIG understands to have been originally written primarily for the purpose of providing regulatory capital relief rather than for arbitrage purposes. The net fair value of the net derivative asset for these CDS transactions was $116 million at December 31, 2009.”   Could that be Greece or some other of the “PIIGS”?  I don’t know what happens to the actual AIG insurance and annuity business if they default on the CDS contracts.  Will that force taxpayers to honor any CDS losses?
          See, Scott, it doesn’t take much looking.