Out Fox The $treet

Jobless claims continue to drop towards the mid 300K level. A number generally consistent with solid jobs growth, but not near the lows of 300K in the mid 2000s. Mark Perry has a great chart showing the jobless claims as a percentage of the civilian workforce. The jobless claims number provides the absolute number of how many looking for a job, but it does a poor job of relating the relative change of the number over time. As the workforce increases over the decades, the absolute total of jobless claims will rise adjusting what should be considered normal claims levels. Unfortunately the market doesn't accurately grasp these changes. Most economics and analysts on tv still subscribe to the numbers from the '80s and '90s when the labor force was much smaller. Seeking Alpha article from Mark : From the chart, it is much clearer that the unemployment situation is actually better than in the '70s and '80s. Only the lows in the '00s provided a sustained l...

Jobless claims is one of the most useful economic stats since it is basically real time as opposed to most numbers that can be a month or two behind. It is also one of the best predictors of economic growth. As economists an investors panicked about a recession in Q3, the jobless claims were telling a different story. Naturally it wasn't one of economic strength, but it clearly wasn't one of a double dip recession. Week after week the numbers came in around the low 400Ks and showed continual progress downward from the April peaks. This mornings US Department of Labor reported seasonally adjusted initial claims of 397K. A decrease of 9K from the previous week's revised figure of 406K. More interesting is that the unadjusted initial claims were 367K. Most people would be surprised to know that the unadjusted numbers have been consistently below 400K. In fact, just a few backs on October 15 the number was 357K. Below is the difference between seasonally adjusted and un...

Just two weeks ago, Stone Fox Capital talked about the importance of a weekly jobless claims figure below 500K. The number didn't make it reporting in at 505K (502K originally), but that is where the key of understanding the future is a lot of times more important then the number reported. On Wednesday, the consensus estimate for Weekly Jobless Claims by Bloomberg is 495K. The low estimate is an incredible 460K with the high only 500K which would happen on its own to be a low for this cycle. So while the market sweated the number reported last Thursday, it was without doubt that the next sequence of numbers would be lower and possibly much lower just the next week. Don't fight the trend by sweating weekly nuances. Especially considering we're most likely to see sub-400K numbers before the trend even becomes a question. Released on 11/25/2009 8:30:00 AM For wk11/21, 2009 Prior Consensus Consensus Range ...

As Stone Fox Capital posted earlier this week in our new focus Future Stat of the Week [Future Stat of the Week: Weekly Jobless Claims] , it's important to pay attention to where economic stats are headed and not so much where they've been. Today, the government reported that jobless claims declined to 502k for last week which is the lowest level since early January. Anybody sweating last Fridays Jobs report clearly is missing the trend. The 4 week average continued its decline hitting sub 520K. The jobless claims is clearly on a path to sub 500K and then probably closer to 400K in the next couple of months. Knowing that would you short the stock market? The Labor Department said Thursday that first-time claims for jobless benefits dropped to a seasonally adjusted 502,000 from an upwardly revised 514,000 the previous week. That's the fewest claims since the week ending Jan. 3, and below economists' estimates. The four-week average, which smooths fluctuations, dropped ...

Future Stat of the Week is a new focus post by Stone Fox Capital. Too often the market focuses on the current economic stat and not the future direction of the stat. Naturally current reported numbers can impact and will impact the direction of the future number especially at inflection points. Normally though the market sweats over gyrations of a number even though the direction of the economic number is unquestioned. Recently the employment numbers have been the major focus of the market. Both the weekly jobless claims (leading indicator) and the monthly jobless numbers (lagging indicator) are routinely hashed and rehashed by the media. Constantly focusing on the absolute monthly number and not the direction or future number. For the employment numbers, it's highly unlikely that the direction (in this case improvement) will change as long as the FED remains with its accommondating plan. For example: when the weekly jobless claims comes in at 550K when the estimate was say 535K a...

The weekly jobless claims for the week ending July 4th were 565K. Substantially lower then expectations around 605K. Being the first week below 600K since January, this was substantially bullish news. The media has trotted out numerous economists to tear down this report as not as good as the headlines due to either holiday shortened week or seasonality issues with autos. Either way, the shortened week and seasonality issues should've been captured in the estimates. CNBC summarized as follows (never mind that the numbers don't add up): The department's seasonal adjustment process expected a large increase in claims from auto workers and other manufacturing workers, the analyst said. Since that didn't occur, seasonally-adjusted claims fell. The non-seasonally adjusted figure increased by about 17,000 to 577,506 initial claims. David Maki from Barclays talks to Bloomberg about the jobless claims report and his expectations for unemployment. Its interesting that he exp...