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Us Jobless Benefits Claims Lowest In Over Two Years

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New US claims for unemployment benefits dropped more than expected last week to their lowest level in more than two years, suggesting the labor market recovery was gaining strength.

New US claims for unemployment benefits dropped more than expected last week to their lowest level in more than two years, suggesting the labor market recovery was gaining strength.

Initial claims for state unemployment benefits fell 34,000 to a seasonally adjusted 388,000, the lowest reading since early July 2008, the Labor Department said on Thursday. That was well below economists' expectations for 415,000.

The prior week's claims figure was revised modestly up to 422,000 from the previously reported 420,000. A Labor Department official said there was nothing unusual in the state-level data and described the report as clean.

"This adds to the idea that the jobs picture is improving ... this is another feather in the cap of the idea of recovery," said Adam Sarhan, chief executive of Sarhan Capital in New York.

It's a miracle.

It's almost like it's Christmas and there's probably loads of temporary jobs.

Viva Recovery.

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Here's the amusing spin machine!

In the week ending Dec. 25, the advance figure for seasonally adjusted initial claims was 388,000, a decrease of 34,000 from the previous week's revised figure of 422,000. The 4-week moving average was 414,000, a decrease of 12,500 from the previous week's revised average of 426,500.

Yeah, ok. Amusing number, really - the DOL invented 133,000 seasonal adjustment jobs!

That is, the unadjusted, actual number was 521,834. That's up 24,879 from the previous week.

This is particularly troublesome to me for a number of reasons - with the week shortened by Christmas Eve (offices closed to a large degree) we should have seen fewer unadjusted claims and the adjustment should have been upward, not downward, to account for the holiday closures.

Are we playing "Goebbels Media" again? Sure looks like it to me.

The complete data table of the various programs to December 11th tells a tale of possible trouble, but the push-pull nature of the story is difficult to decipher:

Note the regular numbers - those are the original 26 week folks coming into the system. That's not a good number at all. It is counter-balanced by 150,000 people departing the EUC programs. What we don't know is if those were people who rolled off the 99 weeks, or if they found jobs. But with the incoming 26 week population rising, odds are rather high that it's the former rather than the latter.

The futures moved up a bit on the original number release, but it appears that people were able to read beyond the headline this time around, and recognized the unadjusted number for what it was - dogcrap - and quickly discarded the "screaming harpy" nonsense from the media.

Dennigers take on it.

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Jobs Forecast 2011 Calculated Risk vs. Mish

Calculated Risk, a good friend of mine, has come up with employment projections for 2011. He thinks the economy will grow by 2.4 million private jobs (200,000 a month), with an upside chance of 3 million jobs.

I think those estimates are extremely high and we will not come close to even 2.4 million jobs. I give my rationale below, but first let's see what Calculated Risk has to say.

Please consider Calculated Risk's Question #5 for 2011: Employment

The U.S. economy added about 87 thousands payroll jobs per month in 2010 through November. This was extremely weak payroll growth for a recovery. How many payroll jobs will be added in 2011?

The U.S. will add around 1.2 million private sector jobs in 2010. And this despite the construction sector losing over 100 thousand jobs in 2010 (the fourth year in a row of construction job losses).

It now appears that job creation is picking up, and it also appears that the construction sector will add employees for the first time since 2006. There were over 2 million construction jobs lost during the downturn, and a relatively small number will be added next year - but every little bit will help.

This suggests to me that private payroll employment will increase by over 2 million jobs next year, maybe as high as 3 million jobs! My guess is around 2.4 million jobs as shown on the following graph.

Graphs and more analysis at the link.

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