Todays economic data miserable
The jobless report was released today which shows the amount of new people currently seeking unemployment benefits. This month showed a jump of 38,000 people to 407,000 people. Remember that this statistic is for the amount of NEW people, not an accumulation of people over the course of the year. This is 407,000 people who have lost a job in the last month. Just a year ago the stats showed just 319,000 people seeking unemployment benefits, a near 30% increase year over year.
More startling is that this is the worst since September 2005 after hurricane Katrina. This shows that unemployment claims have not been worse since a natural disaster, this should send chills up the spines of economists. The number of people who continue to collect unemployment benefits sits at 2.9 Million, a 97,000 person increase in just one month.
The amount of people receiving unemployment hasn’t been this bad since July 2004, even after a major natural disaster the amount of people receiving unemployment payments wasn’t as bad as today’s figures. The statistics just don’t add up, corporations are really starting to cut their workforce to prepare for a recession. Data like this should start to scare Wall Street although it made the day out with a modest gain of 20 points.
Unemployment is expected to increase by as much as 15% towards the latter end of the year. Analysts expect a 5.5% unemployment rate by year’s end up from 4.8% today. This further confirms that the luxury brands are going to get hit hard and deep discounters are going to find a new market.
This comes with news that late loan payments are also reaching their 1992 highs. Anyone familiar with the 1992 housing bust knows that the drop in home values was very limited to certain geographic locations. It would be easy to make the case that the housing bust of today is much larger than the previous bust in 1992. The new credit issued to keep the 1992 housing market from collapsing is now looking for a way out of the system, this shows that the amount of credit today is much higher than just 16 years ago.
The stimulus checks just can’t come soon enough. I expect the world markets to correct tonight and bring some hefty losses tomorrow. Even with a great 400 point rally just a couple days ago, the markets are headed for a minor correction. Watch this news lead a drop tomorrow.