Applications for US jobless aid plunge to 15-year low, a sign growth slowdown may be temporary

[Zippyjuan]

http://www.usnews.com/news/business/...to-15-year-low

WASHINGTON (AP) — The number of Americans seeking unemployment aid plummeted to the lowest level in 15 years last week, evidence that employers are laying off few workers despite a sharp slowdown in economic growth.

Weekly applications for unemployment benefits dropped 34,000 to 262,000, the Labor Department said Thursday. That's the lowest level since April 2000. The four-week average, a less volatile measure, dipped 1,250 to 283,750, near a 15-year low.

Applications are a proxy for layoffs, so the sharp fall indicates that employers remain confident enough in the economy to hold onto their workers.

The economy expanded just 0.2 percent at an annual rate in the January-March quarter, down from the 3.6 percent pace in the second half of last year. Fewer layoffs, however, suggests the growth slowdown may be temporary.

If employers anticipated a longer-lasting slump, it is likely that job cuts and applications for unemployment benefits would rise.

"The trend in claims, below the pre-recession trough, continues to impress," Derek Lindsey, an analyst at BNP Paribas, said. It suggests that weak hiring in March "may have been a blip in an otherwise solid trend."

The number of people receiving aid also fell, dropping 74,000 to 2.25 million. That is the fewest since December 2000.

Most economists blame temporary factors, such as a West Coast port strike and harsh winter weather, for the first quarter's slow growth. Consumers cut back on spending and businesses sharply reduced their investment in new oil and gas drilling, in response to cheaper oil. The strong dollar also weighed on exports and widened the trade gap, dragging down growth.

Yet analysts expect that growth will rebound in the April-June quarter to about 2.5 percent.

[NorthCarolinaLiberty]

This is simply a signal that the paradigm has shifted. Yes, jobs are created, but they are social assistance jobs. This means taxpayer funded, government jobs. Who do these social assistance job holders help? They help the larger numbers of people who can't help, or decline to help, themselves. One example is the chronically unemployed.


Jobs today are not the jobs of yesteryear. This report cites the rise in social assistance jobs. These social assistance jobs are mostly government employment. Combine that with all the Medicare used to pay for health care employment, and you have a great number of jobs where the government (taxpayers) are just taking care of a larger percentage of the population. You can't sustain an economy where an increasing number of jobs are social work and social security.

The healthcare and social assistance industry is expected to continue to add a substantial number of jobs to the economy between 2012 and 2022,...
*

Employment in the healthcare and social assistance industry is projected to increase 29 percent through 2022, compared to an average of 11 percent for all industries.


http://www.nasrecruitment.com/upload...to-2022-72.pdf

[NorthCarolinaLiberty]

That's the lowest level since April 2000.

Let's check what has been rising since 2000. Here is just one example of the aforementioned social assistance rising:


Total cost to administer the SNAP program (millions):


2000---$17,054.02
2001---$17,789.39
2002---$20,637.02
2003---$23,816.28
2004---$27,099.03
2005---$31,072.11
2006---$32,903.06
2007---$33,173.52
2008---$37,639.64
2009---$53,620.01
2010---$68,283.94
2011---$75,687.18
2012---$78,411.05
2013---$79,929.15
2014---$74,139.71




Average participation in SNAP (thousands):


2000--- 17,194
2001--- 17,318
2002--- 19,096
2003--- 21,250
2004--- 23,811
2005--- 25,628
2006--- 26,549
2007--- 26,316
2008--- 28,223
2009--- 33,490
2010--- 40,302
2011--- 44,709
2012--- 46,609
2013--- 47,636
2014--- 46,536




This chart would seem to be a confirmation that more people are on government assistance. More people on assistance means more people to administer those social assistance jobs.






http://www.fns.usda.gov/sites/defaul...NAPsummary.pdf

[Zippyjuan]

"Number of people receiving aid" in the article refers to persons collecting unemployment insurance. http://www.dol.gov/ui/data.pdf

And since you like longer term charts- here is one for Initial Jobless Claims (in thousands of applicants). This is the number of people applying for unemployment insurance for the first time. Also to note- since the chart begins, the total US population has grown by 55% which means the percent of the total population applying for unemployment for the first time is probably a record low- comparable to 175 million in 1975.



http://www.tradingeconomics.com/unit...jobless-claims

Same time frame (40 years) showing long term "Continuing jobless claims"- persons currently collecting unemployment (not just for the first time- again, since this is absolute numbers and not percent of population we must keep in mind that 55% increase in population since the beginning of the chart). As a percent of population, 2.2 million today would be comparable to 1.4 million in 1975.



http://www.tradingeconomics.com/unit...jobless-claims

[NorthCarolinaLiberty]

"Number of people receiving aid" in the article refers to persons collecting unemployment insurance.

Yes, I know exactly what that meant. That is why I made my two posts about the statistic having no meat unless you see the context of shifting money, or shifting paradigm. Instead of getting a check from a private employer, the check is now coming from transfer payments. That does not grow an economy. You can't grow--or even maintain--an economy taking care of people who decline to take of themselves.

[thoughtomator]

GDP print of 0.2%, sure to be revised into the negative at some point in the future.

Mods, please deal with this disinfo agent.

[Zippyjuan]

You are right, as expected, GDP growth in the first quarter was very weak. We had much of the Eastern US shut down by severe storms and on the West coast we had the ports shut down by strikes. Second quarter should be much better.

[NorthCarolinaLiberty]

[Zippyjuan]

In their new chart, Heritage says it is down to 66%. (military takes most of the rest) (noting that federal spending has barely changed since 2009- also note that Federal Spending is not a measure of how an economy is doing).



http://www.heritage.org/federalbudge...ement-programs

Looks like they are counting interest on the debt as an "entitlement" program.

Another chart from them:

[NorthCarolinaLiberty]

In their new chart, Heritage says it is down to 66%.

Year 1962 = 28% welfare

Year 2014 = 66% welfare


That's the difference between the long term view and the short term view.

[NorthCarolinaLiberty]

Is that all you got? Short term trends reflecting a short attention span?

Unlike you, I don't even get paid to this. Where do I sign up for a job like yours? lol

[oyarde]

This $#@! is depressing .

[anaconda]

If one's unemployment benefits expired and they never were able to find a job, they cannot file a new claim. Perhaps this is why the claims filed are becoming less.

[NorthCarolinaLiberty]

If one's unemployment benefits expired and they never were able to find a job, they cannot file a new claim. Perhaps this is why the claims filed are becoming less.

Sounds like a fair point. I also wonder how much these extensions have affected sign-ups. Were benefit periods shorter in the past, such as the 1970s? How did the 99 week unemployment benefit program affect sign-ups? The 99 week program was unprecedented. Certainly that would reduce sign-up claims.

[anaconda]

Sounds like a fair point. I also wonder how much these extensions have affected sign-ups. Were benefit periods shorter in the past, such as the 1970s? How did the 99 week unemployment benefit program affect sign-ups? The 99 week program was unprecedented. Certainly that would reduce sign-up claims.

Might be difficult to ascertain if the employment situation was/is bad enough. If one cannot find a job, it doesn't really matter if it's 99 weeks or 16 weeks. My only point is that, if there are permanently unemployed people, they have fallen off the statistical grid. This will improve the government's faux numbers, since these people are statistically no longer in the labor market.

[Ronin Truth]

Election economics bogus spin reporting is starting early this year.

[Zippyjuan]

Might be difficult to ascertain if the employment situation was/is bad enough. If one cannot find a job, it doesn't really matter if it's 99 weeks or 16 weeks. My only point is that, if there are permanently unemployed people, they have fallen off the statistical grid. This will improve the government's faux numbers, since these people are statistically no longer in the labor market.

According to BLS figures for March, there were 91 million not in the labor force. Of those, 5.9 million said they left the workforce because they could not find a job but wanted one. It was 6.1 million a year prior. http://www.bls.gov/news.release/empsit.t16.htm

Discouraged workers, "those who did not actively look for work in the prior 4 weeks for reasons such as thinks no work available, could not find work, lacks schooling or training, employer thinks too young or old, and other types of discrimination" totaled 698,000, down from 738,000 year before.

[loveshiscountry]

If one's unemployment benefits expired and they never were able to find a job, they cannot file a new claim. Perhaps this is why the claims filed are becoming less.

In March, about 29.8 percent of unemployed Americans had been out of work for 27 weeks or more. Well above normal levels.
From 2003 to mid 2008 the average was 16-23 weeks

https://research.stlouisfed.org/fred...es/LNU03008275

[Cleaner44]

What I would find a more interesting measure of joblessness would be the percentage of adults working vs the U.S, population.

[Zippyjuan]

Unemployment is the percent of people who either have jobs or want jobs. They don't count retired people, stay at home moms and dads, disabled people, or students who aren't working or those who for whatever reason aren't looking for work. When you have an aging population with lots of people retiring it can make your unemployment numbers seem worse than they really are. The "labor force participation rate" is a measure of the total population either working or looking for work. Should we be concerned about the portion who does not want a job?

NorthCarolinaLiberty was comparing today to 1962 to show how much worse things are today. In 1962, the Labor Force Participation Rate was only 59% which meant that 41% of the adult population was not working (for whatever reason). Today, it is 63% which means a higher percent of the population was not working in 1962. http://research.stlouisfed.org/fred2/data/CIVPART.txt

[NorthCarolinaLiberty]

NorthCarolinaLiberty was comparing today to 1962 to show how much worse things are today.

I'm not saying it's MUCH worse, but it's clear to me that America has declined in certain areas.

In 1962, the Labor Force Participation Rate was only 59%... Today, it is 63%...

Comparing welfare that went 28% ----> 66% to labor force participation that went 59% ----> 63% over the same period is apples to oranges. You're comparing a phenomenon of women entering the workforce to giving huge chunks of money to people who refuse to work or don't work.

People can legitimately debate if women entering the workforce is "good" or "bad," citing feminism, materialism, higher health and education costs, etc.

There is however, an objective economic component that is difficult to argue. There are fewer people to support more retirees. If it increasingly takes more transfer payments (e.g., more women working and paying into SS) to support more people who don't work, then that is an economy that can't sustain at previous levels.

[torchbearer]

http://www.zerohedge.com/news/2015-0...re-6000-stores

If the U.S. economy really is improving, then why are big U.S. retailers permanently shutting down thousands of stores? The “retail apocalypse” that I have written about so frequently appears to be accelerating. As you will see below, major U.S. retailers have announced that they are closing more than 6,000 locations, but economic conditions in this country are still fairly stable. So if this is happening already, what are things going to look like once the next recession strikes? For a long time, I have been pointing to 2015 as a major “turning point” for the U.S. economy, and I still feel that way. And since I started The Economic Collapse Blog at the end of 2009, I have never seen as many indications that we are headed into another major economic downturn as I do right now. If retailers are closing this many stores already, what are our malls and shopping centers going to look like a few years from now?The list below comes from information compiled by About.com, but I have only included major retailers that have announced plans to close at least 10 stores. Most of these closures will take place this year, but in some instances the closures are scheduled to be phased in over a number of years. As you can see, the number of stores that are being permanently shut down is absolutely staggering…
180 Abercrombie & Fitch (by 2015)
75 Aeropostale (through January 2015)
150 American Eagle Outfitters (through 2017)
223 Barnes & Noble (through 2023)
265 Body Central / Body Shop
66 Bottom Dollar Food
25 Build-A-Bear (through 2015)
32 C. Wonder
21 Cache
120 Chico’s (through 2017)
200 Children’s Place (through 2017)
17 Christopher & Banks
70 Coach (fiscal 2015)
70 Coco’s /Carrows
300 Deb Shops
92 Delia’s
340 Dollar Tree/Family Dollar
39 Einstein Bros. Bagels
50 Express (through 2015)
31 Frederick’s of Hollywood
50 Fresh & Easy Grocey Stores
14 Friendly’s
65 Future Shop (Best Buy Canada)
54 Golf Galaxy (by 2016)
50 Guess (through 2015)
26 Gymboree
40 JCPenney
127 Jones New York Outlet
10 Just Baked
28 Kate Spade Saturday & Jack Spade
14 Macy’s
400 Office Depot/Office Max (by 2016)
63 Pep Boys (“in the coming years”)
100 Pier One (by 2017)
20 Pick ’n Save (by 2017)
1,784 Radio Shack
13 Ruby Tuesday
77 Sears
10 SpartanNash Grocery Stores
55 Staples (2015)
133 Target, Canada (bankruptcy)
31 Tiger Direct
200 Walgreens (by 2017)
10 West Marine
338 Wet Seal
80 Wolverine World Wide (2015 – Stride Rite & Keds)
So why is this happening?
Without a doubt, Internet retailing is taking a huge toll on brick and mortar stores, and this is a trend that is not going to end any time soon.
But as Thad Beversdorf has pointed out, we have also seen a stunning decline in true discretionary consumer spending over the past six months…

What we find is that over the past 6 months we had a tremendous drop in true discretionary consumer spending. Within the overall downtrend we do see a bit of a rally in February but quite ominously that rally failed and the bottom absolutely fell out. Again the importance is it confirms the fundamental theory that consumer spending is showing the initial signs of a severe pull back. A worrying signal to be certain as we would expect this pull back to begin impacting other areas of consumer spending. The reason is that American consumers typically do not voluntarily pull back like that on spending but do so because they have run out of credit. And if credit is running thin it will surely be felt in all spending.

The truth is that middle class U.S. consumers are tapped out. Most families are just scraping by financially from month to month. For most Americans, there simply is not a whole lot of extra money left over to go shopping with these days.
In fact, at this point approximately one out of every four Americans spend at least half of their incomes just on rent…

More than one in four Americans are spending at least half of their family income on rent – leaving little money left to purchase groceries, buy clothing or put gas in the car, new figures have revealed.

A staggering 11.25 million households consume 50 percent or more of their income on housing and utilities, according to an analysis of Census data by nonprofit firm, Enterprise Community Partners.

And 1.8 million of these households spend at least 70 percent of their paychecks on rent.

The surging cost of rental housing has affected a rising number of families since the Great Recession hit in 2007. Officials define housing costs in excess of 30 percent of income as burdensome.

For decades, the U.S. economy was powered by a free spending middle class that had plenty of discretionary income to throw around. But now that the middle class is being systematically destroyed, that paradigm is changing. Americans families simply do not have the same resources that they once did, and that spells big trouble for retailers.
As you read this article, the United States still has more retail space per person than any other nation on the planet. But as stores close by the thousands, “space available” signs are going to be popping up everywhere. This is especially going to be true in poor and lower middle class neighborhoods. Especially after what we just witnessed in Baltimore, many retailers are not going to hesitate to shut down underperforming locations in impoverished areas.
And remember, the next major economic crisis has not even arrived yet. Once it does, the business environment in this country is going to change dramatically, and a few years from now America is going to look far different than it does right now.

[Zippyjuan]

Comparing welfare that went 28% ----> 66% to labor force participation that went 59% ----> 63% over the same period is apples to oranges. You're comparing a phenomenon of women entering the workforce to giving huge chunks of money to people who refuse to work or don't work.

Are you saying things are different today than they were in 1962? They certainly are. Hugely different which makes most comparisons between the two apples and oranges. We can lower the percent going to social programs by spending more on the military- which accounted for 49% of the budget in 1962. http://federal-budget.insidegov.com/l/64/1962

There are fewer people to support more retirees. If it increasingly takes more transfer payments (e.g., more women working and paying into SS) to support more people who don't work, then that is an economy that can't sustain at previous levels.

This is certainly true. Demographics have shifted. In 1962, the population was young. The baby boomers just starting out. Today, the population is older and boomers are retiring. Median age in 1960 was 29- today it is 38. http://www.statista.com/statistics/2...us-population/

[NorthCarolinaLiberty]

We can lower the percent going to social programs by spending more on the military-

Not sure if you're advocating that in a roundabout way. If so, then it's a false dichotomy. I'm not for shifting, but for cutting both.

[Zippyjuan]

http://www.zerohedge.com/news/2015-0...re-6000-stores

How many new stores replaced them? Businesses open and close locations all the time. How many were actually shut down and not sold to another company? With all those stores closing- how have retail sales been?

[torchbearer]

I can only speak to local growth. Its not there. But it could just be local.
Everywhere else green shoots?

[euphemia]

I know my employer cut labor by about a third in the past 12 months. The loss of a thousand people is noticeable.

[NorthCarolinaLiberty]

ISM Purchasing Managers Index:

New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices



http://www.tradingeconomics.com/unit...ess-confidence

[Zippyjuan]

This list of retail store openings includes foreign locations at the link so I will only select some of the domestic ones and only those adding at least 50 locations. List is for 2014 planned openings.

http://retailindustry.about.com/od/s...national_2.htm

800 Tim Horton’s (U.S., Middle East through 2018)
700 Dollar General
525 Family Dollar
300 Wal-Mart Express Neighborhood Neighborhood Market
223 Dollar Tree
200 O’Reilly Auto Parts
130 ALDI (U.S., 650 stores through 2019)
127 Juicy Couture “shop-in-shops” (through 2019)
120 Nordstrom Rack (through 2016)
115 Wal-Mart (large format)
90 Samsung (Best Buy Canada Kiosks)
85 Francesca’s
75 Ross Dress for Less
75 Walgreens
70 Hobby Lobby
70 Miu Miu (by 2016)
60 Biggby Coffee
60 Dunkin Donuts (through 2018 in Houston)
60 Fresh Thyme Farmers Markets (through 2019)
60 Pizza Hut (through 2017)
50 Prada Men’s Store (by 2016)
50 Sonic Drive-In

[Zippyjuan]

ISM Purchasing Managers Index:

New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices



http://www.tradingeconomics.com/unit...ess-confidence

Thanks for the chart. Bit more on it:

A PMI™ reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining.

Still in "expansion" figures. Anything over 50 is good.