Economics Update (a Day Late)

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Unemployment Numbers, Actual v. Seasonably Adjusted


Philly Fed Graph Pr0n Courtesy Calculated Risk


NY Fed Graph Pr0n Courtesy The Bonddad Blog

So, Seasonally adjusted first time unemployment claims fell to 514,000, the lowest level since January, the 4 week moving average fell by 9K to 531,500, and continuing claims fell 75K to 5.99 million, the first time that the number has been below 6 million in 6 months.

Well, sort of anyway. As Brad Delong notes, the non-seasonally adjusted number actually went up:

Unemployment Insurance claims rose from 452,000 last week to 504,000 this week, but the seasonal adjustment factor fell from +72,000 to +10,000, leaving seasonally-adjusted claims falling from 524,000 to 514,000.

Considering the strangeness of the times that we are currently going through, this does mean that the SA numbers have a bit of flakiness.

Still these numbers, as well as the New York and Philadelphia Federal Reserve activity indices are definitely trending better.

The reason that I think that this is a pause, rather than a recovery, is because the underlying problems remain unresolved, with foreclosures hitting an all time high in the 3^rd quarter.

About 1 out of 136 homes got a foreclosure notice in the past quarter.

That along with the fact that the CPI numbers are showing that "Owners' Equivalent Rent" is falling, which implies that home prices have even farther to fall before the rent/own ratio is back to where it should be imply to me that the real estate crash is still on the down slope.

Additionally, it's clear that consumers are still stretched, with Capital One credit card defaults rising in September.

30 year fixed mortgage rates remain below 5%, though they are up a bit this week.

In energy, oil is now at a 2009 high, and in currency, the
dollar rose against the Yen, but fell against the Pound Sterling and Euro.