3rd June 2011
Today will provide us with more information as we will receive the employment (non-farm payroll figures) and unemployment figures for the month of May. There is a lot of debate over non-farm payrolls and in particular over the birth/death adjustment which recently has added to the number often substantially. As the former is seasonally adjusted and the other is not they cannot be directly compared – which does not stop many trying!-, however the high level of the birth/death adjustment does lead to a sense of unease about the figures.
Initial jobless claims
I have been following the weekly initial jobless claims figures as they give us as timely a guide as we get as to the US employment/unemployment situation. From the Department of Labor:
"In the week ending May 28, the advance figure for seasonally adjusted initial claims was 422,000, a decrease of 6,000 from the previous week's revised figure of 428,000. The 4-week moving average was 425,500, a decrease of 14,000 from the previous week's revised average of 439,500."
So we see several things happening here. Again we have the headline above 400,000 and the more important four-week average remains above 400,000 too. What numbers above this threshold indicate is a deterioration in the US unemployment situation. Put another way we have gone back to the sort of numbers that made the US Federal Reserve launch its latest programme of asset purchases which became called QE2. There is a grim element in timing in this as QE2 is scheduled to end in 27 days time.
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