The headline seasonally finagled number of first time unemployment claims was 320,000 in the week ended March 15, beating Wall Street conomists' consensus guess of 330,000. As with other data for February and March, the pundits and their media handmaidens had conditioned the market to expect downbeat numbers.
We knew otherwise. But the market was yet again surprised by the strong number this morning and once more took off like a scalded dog. Do that to me one more time! Rest assured that the Primary Dealers were well prepared as they had shaken the tree for a little extra inventory yesterday when Yellen said something about the prisoner having 6 months to live.
The Pavlovian training to expect bad numbers has been a two month long setup. While the Wall Street punditocracy has been busy grousing about the lousy weather, they have ignored real time data which has shown things heating up. I have absolutely no doubt that Goldman and JPM are well aware of the actual numbers and have been positioning to take advantage of the institutional sheep herd, glued to their CNBC monitors and Bloomberg terminals, wringing their hands about the Taper and supposedly slowing economy.
Sure, the economic gains are grossly and dangerously unbalanced. Stocks regularly forge new record highs. Wild, leveraged speculation with free money pays off every time. There are no consequences for reckless gambling. Saving is punished. Financial crime pays! The top 1% of income earners enjoys a free money bacchanalia of consumptive debauchery. The next 9% are having a pretty good time too. The next 10% are ok, and the 10% after that are treading water. Everybody else is in the soup, but the top is doing so well that the top line numbers... they look marvelous.
As the Labor Department (DOL) reported it, "In the week ending March 15, the advance figure for seasonally adjusted initial claims was 320,000, an increase of 5,000 from the previous week's unrevised figure of 315,000."
This isn't the number actually counted by the 50 states and reported to the Federal Government. The DOL also reports that number, but the media doesn't bother covering it. Reality is just too damn complicated for financial "journalism's" rock stars. Said the DOL, "The advance number of actual initial claims under state programs, unadjusted, totaled 285,316 in the week ending March 15, a decrease of 16,995 from the previous week. There were 300,951 initial claims in the comparable week in 2013."
The 285,000 claims last week was the smallest number for that week of March since 2007. Claims were down by 17,000 from the week before, which was about the same as the change for the comparable week of 2013, but less than the 10 year average decline of 25,000 for that week. On a year to year basis, claims are down 5.2%. That's near the recent range of annual change, but that has been slower than the 10% year to year declines that have been prevalent for the past 3 years.
The trend of improvement in job losses has gradually slowed over the past two years but stock prices have continued to spiral higher, and so have Federal withholding tax collections, more evidence that enormous gains at the top of the income spectrum are skewing the totals, while hiding the fact that most people are not doing better.
Bubbles may be hard to define, but they're easy to see when you look at a chart. As the two trends on the above chart continue to diverge, the danger grows, both for the US economy and American workers, and for the stock market. Those who are currently partying at the top should not rest easy.