Free Markets, Free People

Jobless claims “unexpectedly” rise

Yup, as Tim Geithner would say – “welcome to the recovery”.  And, given the trends, I would guess this isn’t the last of the “unexpectedly” high unemployment report we’ll see.  Again, ad nauseam, there’s been no incentive provided by government, but plenty of disincentives that are keeping businesses on the sidelines and consumers from spending:

Initial jobless claims climbed by 19,000 to 479,000 in the week ended July 31, the most since April and exceeding the highest estimate of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. The number of people receiving unemployment benefits dropped, while those getting extended payments rose.

A cooling economy means employers will resist taking on more staff in coming months, raising the risk consumer spending will weaken further. The jobless rate rose last month as payroll increases weren’t large enough to keep up with gains in the labor force, economists forecast a government report tomorrow will show.

As if anyone has to be told, this is not good.  And it wouldn’t surprise me to see the U6 unemployment rate tick up over 10% again in the next few months:

“There really is no upside momentum in the labor market, and that’s a critical long-term determinant of where the economy is going,” said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York. “People just aren’t getting jobs.”

That’s because jobs aren’t being created and offered.  Name the incentive, at this point, to do so?  Tax increases are in the offing, health care laws, 1099 requirements, Democrats still pushing for cap-and-trade, new financial regulations that impact the market and economic policies which give the impression the administration is at war with business.

Why would any sane business owner invest in his business in times as unsettled as these?

Answer: he or she wouldn’t.  And that’s the biggest reason unemployment continues to “unexpectedly” rise.  Headcount is the easiest thing to add when times are good.  It’s also the easiest thing to reduce when times are bad.  And if they stay bad – as we’re seeing now – few if any are going to be adding jobs.

Economics 101 – provide incentives to get the behavior you want.  Provide disincentives to discourage the behavior you don’t want.  The administration’s economic policies have, to this point, provided business with all manner of disincentives to hiring.  And then the “experts” are surprised when jobless rates are “unexpectedly” higher than estimated.

Go figure.


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17 Responses to Jobless claims “unexpectedly” rise

    Markets innovate and improve the standard of living.
    It really is THAT simple.

  • The sun unexpectedly rose in the east this morning.
    Gravity unexpectedly continued to work.
    Water is unexpectedly wet.
    Scott Erb unexpectedly fellated the president.

  • Erb will be by to tell us “I’m optimistic!”, perhaps he’ll mention that he expects Obama will get the deficit under control or he’ll be in trouble over the long term (a prediction he made last year in August as well).
    Though one of Erb’s saynings applies – as long as the administration, House, Senate, Executive, continues to act as they do we should definitely “get used to it”.
    I don’t know why we’re complaining, after all, Turbotax Timmy told us just the other day unemployment would go up before it went back down.    He’s almost as good as Erb at making meaningless predictions.

  • A cooling economy…

    WTF???  This is the Summer of Recovery!  Secretary Geithner said so just the other day!  And… and… and… The president told us how great all of his policies are working!  And the chocolate ration was just increased from 30 g to 20 g!  They can’t be lying, can they?

    / sarc

  • GWB, knock it off for crying out loud!

    • What we need is a scene of Obama, standing on the portico of the White House,  the country crumbling around him as he yells –
      like Kirk in Star Trek’s  “Wrath of Khan”.

  • The U6 unemployment is already above 10%.   U6 stands at 16.5%
    It is the U3 that will probably go above 10% as it sits in June at 9.5%

  • But it would have been much worse if Obama hadn’t stuck his d**k in the mouth of the economy. So count your blessings.

  • These goddamn evil sons of bitches have used our tax money to prop up their union thugs and now GM is using money taken from us to give to democratic candidates.

    I wish I had more faith than an agnostic, because my fervent prayer, if there is a god, is that these bastards one day be brought to trial for this shit.

    • Try it from the perspective of a Christian: “Why is God doing this to us???”


      1.  We’ve been through worse and He’s seen us through, and;

      2.  He gives and He takes away.  He takes away and He gives.  We only know good because we know evil.  There would have been no George Washington without George III.

      • Yeah, that is part of the problem I have with the whole thing. That whole argument never made any sense to me whatsoever. Like I never thought the book of Job had any place at all in the bible. It presents God as a feckless and capricious God like the Gods worshiped by the pagans, Willing to visit unbelievable suffering upon Job on nothing more than a dare.

  • What does it tell you when Christina Romer, chairwoman of Pres. Obama’s Council of Economic Advisers, resigns. Rumours are that she didn’t have a “direct line” into the President. Guess she isn’t a part of the Harvard Mafia, being from William and Mary & MIT.

    • I don;t know what to think about Romer.  She was being forced to defend decisions she did not agree with, at least if we take her papers seriously.  If she was constantly being denigrated by O’Donnel and denied access to the President to make her case, it would seem to pretty much be a waste to be a part of the government plus it would affect her reputation negatively.
      If what I think was going on, was going on, her only real option was to quit.   Obama is now between a rock a hard place.  Stiglitz and Krugman are screaming for more stimulus arguing the first one of $860 billion was not big enough.  But, the country is opposed and there is little appetite for more spending and more deficit from Congress.  At the same time the left is crying for the Bush tax cuts to expire, but it is clear to most of us that will harm the economy just as FDR increased taxes and wallowed right into the 1937 second dip.   Obama has dug himself a real hole and he can no longer get away with “I didn’t do it; Bush did it”.