Maybe the Hurricane damage has something to do with this, but the weekly jobless claims are reaching a critical point. This last week’s initial jobless claims rose again to 497,000. The Labor Department put an estimate that 45,000 of these were related to Hurricane Ike. The prior week’s report was also revised higher from 493,000 to 496,000. This report is the highest reading since the last week in September of 2001.
It doesn’t really matter that the economist consensus estimates wereabout 475,000 to 485,000 depending upon your sources. What mattershere is that this is nearly 500,000 new jobless claims. The priorweek’s revision makes you wonder if the number wasn’t even a tadhigher. There is no real economic difference between 495,000 and500,002 unless you are personally among the 5,002 in question. But thepsychological damage of this is massive.
The four-week average smooths out some of the weekly volatility, butthat number also rose by 11,500 to 474,000. This is also the highestreading since October 2001 and is a large signal that there are realdeclines in monthly employment. The continuing claims jumped by 48,000to 3,591,000.
When we have an economy in this much trouble and the jobs numbers arelooking this bad, let’s just say that it is hard to imagine a suddenrecovery. A bailout package will help ease some concerns. This sets anominous tone for tomorrow’s unemployment and non-farm payrolls data.
Jon C. Ogg
October 2, 2008
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