No one expects rising unemployment!
[Posted by Karl]
When it comes to the establishment media — and the economists in their address books — their chief weapon is surprise (and a fanatical devotion to The One):
The number of U.S. workers filing new applications for unemployment insurance unexpectedly surged last week, while producer prices increased sharply in January, raising potential hurdles for the economy’s recovery.
***
The rise in jobless insurance claims dealt a setback to hopes the economy was on the verge of job growth and could increase political pressure on President Barack Obama, who has made tackling unemployment his number one priority.
This surge in claims puts a damper on the last report, in which the unemployment rate dropped unexpectedly. However, it is consistent with the recent trend of unemployment news being “unexpectedly” bad again and again and again and again and again and well, you get the picture:
“Initial claims have been flat over the last three months. That means the improvement in the labor market is much slower than suggested by the headline GDP figure,” said Harm Bandholz an economist at Unicredit Research in New York.
“That shows GDP growth is artificially inflated by government stimulus and the inventory cycle rather than driven by final demand, which usually goes hand in hand with an improvement in the labor market.”
Indeed, the jobs purportedly “saved” by the government were largely in the government, not the private sector. And the 5.7% annualized growth in GDP for the fourth quarter of 2009 was mostly the result of a slowdown in liquidation of inventories; actual growth was much lower.
Reuters notes a number of reasons, including the recent snowpocalypse that hit broad sections of the country, as reasons to expect a weak report. Yet somehow, the bad news on unemployment continues to be unexpected. Go figure.
–Karl
I don’t know whether Reuters is using this, but there are analysts expectations that are published, and thus there is an objective way in which to describe whether a particular economic news release is “unexpectedly” high or low.
imdw (d9e9a5) — 2/18/2010 @ 11:24 amIt’s only unexpected to those who think Obama’s policies would have produced positive results.
For everybody else, who recognize that Obama’s policies do nothing to promote real private sector growth, it is no surprise that employers and consumers remain pessimistic and it is no surprise that pessimistic employers continue to reduce their workforce and it is no surprise that recently laid off people will file for unemployment as they don’t have much hope of finding a new job in the immediate future.
To me, the economy is reacting just as it ought to in the face of anti-growth government policies.
steve sturm (369bc6) — 2/18/2010 @ 11:34 amThis is …
Neo (7830e6) — 2/18/2010 @ 11:45 amHeresy by thought
Heresy by word
Heresy by deed
Heresy by action
… confess or prepare for the “soft cushions” and the “comfy chair“.
Karl – did you notice how little attention was paid to the 800,000+ revision in the unemployment numbers for last year?
JD (3567dc) — 2/18/2010 @ 11:48 amUnemployment is “unexpectedly” rising, and is met with reports of “unexpected” increases in the Wholesale Price Index;
AD - RtR/OS! (2215b9) — 2/18/2010 @ 11:53 amCan you spell “Stagflation“?
The Consumer Price Index number comes out tomorrow. Let’s see if there’s follow-through.
Official Internet Data Office (99772e) — 2/18/2010 @ 11:58 amthis sort of surprise in unprecedented!
redc1c4 (fb8750) — 2/18/2010 @ 12:11 pmSomeone forgot to que the unicorns, and turn on the pixie-dust spreaders.
AD - RtR/OS! (2215b9) — 2/18/2010 @ 12:24 pmThe GOP slogan for 11/2/2010 should be: And now, its time for something fompletely different.
Sean P (4fde41) — 2/18/2010 @ 12:37 pmthe jobs purportedly “saved” by the government were largely in the government
This is exceedingly dangerous and stupid I think, for the dirty socialists to embrace this sort of Two Americas. Very North Korea.
happyfeet (71f55e) — 2/18/2010 @ 12:55 pmThe GOP slogan for 11/2/2010 should be: And now, its time for something completely different.
No offense, but duh! Every opposition party runs on change, the incumbent party runs on staying the course (albeit it sometimes with modifications such as Bush I’s ‘kinder gentler’).
If the public likes what it is going on, the incumbent party wins, if the public ain’t happy, the challenging party wins. that is, of course, unless the nominees are clowns like Gore and Kerry.
Given that it’s unlikely the public is going to be happy come 2012 (who really believes Obama’s policies are going to make things any better in 3 years than they are now?), the GOP is well positioned to recapture the White House… unless they nominate someone who is the 2012 version of Kerry… such as Sarah Palin.
steve sturm (369bc6) — 2/18/2010 @ 12:59 pmWe don’t hear much about right track/wrong track like how we did when the president was that Bush guy, mostly I think cause the little president man we have now embraces our little country’s decline. The wrong track is become the right track. We inherited this mess isn’t as much about displacing blame as it is about rationalizing a governing philosophy of Decline Management I think.
happyfeet (71f55e) — 2/18/2010 @ 1:11 pmimdw,
Re: analysts’ expectations
That’s why there’s a reference to the economists in the reporters’ address books in the opening sentence.
If you were a reporter, and you kept calling the same economists and they were wrong time after time after time, would you (a) keep relying on them, or (b) do a story on why they can’t get it right?
Karl (f07e38) — 2/18/2010 @ 2:00 pm“… three reasons!… Wait, I’ll come in again.”
mojo (8096f2) — 2/18/2010 @ 2:02 pmIt’s like calling Moody’s Economy.com to ask if in their opinion another stimulus would be beneficial.
happyfeet (71f55e) — 2/18/2010 @ 2:03 pmIt’s not just that the predictions and tone is all wrong, it’s that it’s clearly another aspect of a propaganda campaign. 5% unemployment and 3% growth under Bush was called a depression and a recession and horrible. 11% unemployment and negative growth under Obama is called an unexpected detour from our obvious recovery.
the dems inherited a booming economy in Nov 2006. Look what they did. You have to look yourself because the ‘experts’ want to fool you.
Dustin (b54cdc) — 2/18/2010 @ 2:08 pm“That’s why there’s a reference to the economists in the reporters’ address books in the opening sentence.
If you were a reporter, and you kept calling the same economists and they were wrong time after time after time, would you (a) keep relying on them, or (b) do a story on why they can’t get it right?”
I’m talking about calling and getting quotables from economists the reporter knows. I’m talking about analysts expectations. You’ll see lots if not all stories about jobless claims talk about the expectations. My understanding is they’re supposed to represent the wall street consensus. And published. You can find them for earnings forecasts too.
imdw (1f6522) — 2/18/2010 @ 2:20 pmSave it, Karl. There are rolls of toilet paper better capable of processing input.
JD (3399c0) — 2/18/2010 @ 2:26 pm“…My understanding…” is wrong, again.
AD - RtR/OS! (2215b9) — 2/18/2010 @ 2:30 pmWhat’s amusing is that when MSNBC or NBC or CBS or Harvard economists inevitably condemn whoever the GOP nominates and their policies, no one is going to be influenced.
When they promise Obama’s getting everything right if we just give him another 4 years, no one will believe them. They just couldn’t help themselves and now their credibility is gone.
It’s very Monty Python-esque.
Dustin (b54cdc) — 2/18/2010 @ 2:31 pmMy understanding … I think … These markers are comparable to Barcky’s “let me be clear” and “it has always been my position”.
JD (3399c0) — 2/18/2010 @ 2:31 pmI recall many opinion polls a few years ago — when unemployment rates were much lower and basic economic stats were pretty good (if only because of the bubble in things like real estate) — indicating a majority of Americans were unhappy about the economy and thinking the country was headed in the wrong direction. I’d scratch my head and go “huh?!”
Of course, some of that angst was understandably due to the Iraq War. But I suspect a good part of it also was society becoming so fat, prosperous and sassy that an odd mix of do-gooder guilt, Nervous Nellie paranoia and self-entitled, woe-is-me fecklessness were beginning to overtake a lot of people.
In effect, we’ve now grown into what we were wringing our hands about a few years ago.
Mark (411533) — 2/18/2010 @ 2:36 pm“I’m talking about calling and getting quotables from economists the reporter knows.”
oops. That should be “I’m NOT talking about”
imdw (33ae78) — 2/18/2010 @ 2:50 pmExpect the unexpected.
GeneralMalaise (e8d02c) — 2/18/2010 @ 4:52 pmThe government dropped 8 million jobs from their “inventory,” which explains why the unemployment numbers started to look good. They may not be able to do that again for a year. Time will soon catch up with the government reports.
Jim (582155) — 2/18/2010 @ 4:57 pmThe only thing they expected about this is that it would be Bush’s fault.
Kevin Murphy (805c5b) — 2/18/2010 @ 5:09 pm[…] has the summary ::: This surge in claims puts a damper on the last report, in which the unemployment rate […]
When “Unexpected” Increases in Unemployment Become Expected to be Unexpected » The Golden Gate (c069b6) — 2/21/2010 @ 1:42 am