Continuing Jobless Claims sets (yet another) record

While some people are still happy that the second derivative of first time jobless claims is flat or negative (for those of you who never took calculus---that means that there are fewer people filing for the first time for unemployment insurance benefits compared to the prior week)---the story of the second derivative of continuing claims isn't as chipper.

As you can see from the chart above---Continuing claims continue to set records. Almost 6.8 million Americans are collecting unemployment insurance benefits--That's more than double from last year---and significantly up from the 2000 low of ~2 million.

Based on this data, you can be sure that the unemployment rate in May 2009 will be north of 9%, and it likely won't be below 7% for years to come.

5 Unemployed Workers for Every 1 Job Opening

Jake at EconoPicData has published this very interesting chart (shown above) that is a neat way of showing what I blogged about a month ago concerning that there are 5 unemployed job seekers out there for every single job opening.

Jake's way of showing the data is a bit more visually pleasing compared to my way---but the point is clear---the amount of unemployed Americans continues to grow, while the numbers of available jobs continue to shrink. And as Jake notes this could possibly to a future wave of stagfaltion---as inflation increases commodity prices, yet workers are unable to generate wage growth---because at the margin, there's so many more people willing to do work now than what there was just a couple of years ago.

Mass Layoff Index vs. Initial Unemployment Insurance Claims

Click on Chart for a Larger Image

The Bureau of Labor Statistics today published a pretty interesting chart that plots the Mass Layoff Index (Red dashed line, Left-Hand Scale) against the Initial Claims for Unemployment Insurance Benefits (Blue Line, Right Hand Scale).

It's interesting to note that the correlation shows that roughly 100 people file for UI benefits for every mass layoff---but you shouldn't read into that meaning that on average a mass layoff = 100 workers. Actually it would be less than that, because smaller businesses also are laying off people---but when economic conditions are bad enough for big business to lay people off (which would be registered in the Mass Layoff statistics), that would mean that smaller companies would likewise be letting people go.

The other interesting point on the chart is that back around December 2007---There was ~150,000/week filing first time claims---Now there's ~250,000 - 300,000 people per week filing claims. People might call the recent weeks declines a green-shoot---but compared to last year, it certainly is not.

Unemployment Rate Map---April 2009

The AP has published a map showing the April 2009 unemployment rate by state (shown below)--For your reference point, the national average was 8.9%. Click on chart for a larger image

As you can tell by the chart the states with the worst unemployment are located in the West (California, Nevada, Oregon), Midwest (Michigan, Ohio) and SouthEast (The Carolinas)... And then there's the swatch of states spanning the length of the Mississippi River from the Great Lakes to the Gulf that have unemployment rates between 8.1% and 10%

States with the highest unemployment rate in April-2009

Click on Chart for a Larger Image

According the Bureau of Labor Statistics, 21 states saw their unemployment rate decrease in April 2009 vs. March 2009 and 18 states (& Washington DC) saw their unemployment rate increase month-on-month.

The States with the highest rates of unemployment in April include:

1. Michigan 12.9% (up 0.3pp in the month)
2. Oregon 12.0% (down 0.1pp in the month)
3. South Carolina 11.5% (up 0.1pp)
4. Rhode Island 11.1% (up 0.6 pp)
5. California 11.0% (down 0.2 pp)
6. North Carolina 10.8% (same)
7. Nevada 10.6% (up 0.2pp)
8. Ohio 10.2% (up 0.5pp)
9. Indiana 9.9% (down 0.1)
10. Washington DC 9.9% (up 0.1)
11. Tennessee 9.9% (up 0.3)
12. Kentucky 9.8% (same)
13. Florida 9.6% (down 0.1)

Now in order for the increase/decrease in unemployment rate to be statistically significant in the month it should move by at least 0.3 percentage points---so statistically speaking most of the states were flat March to April---But things definitely got worse in Michigan, Rhode Island, Ohio and Tennessee.

GM to lay-off 3,400 White Collar Workers

According to the Detroit Free Press, General Motors is going to be letting go 3,400 additional white collar workers in the coming weeks.

Things are going tough for GM, as their market share dropped to below 20% (from 50% decades ago)---and a pending bankruptcy in a couple of weeks... My guess is that you'll be seeing more job losses in the auto sector as GM and Chrysler go through bankruptcy---hurting their dealer base and supplier organization.

Army Recruiting easily meeting their quotas

Fox 5 in Atlanta, Georgia reports (5 minutes) on the fact that military recruiters are having an easier time surpassing their recruitment quotas as the job market continues to dry up.

The story highlights 8 high-school seniors who have chosen to enlist in the army rather than go immediately to college. Amanda Davis, interviews several proud parents as their young children join Uncle Sam's armed services. The recruits highlight the fact that it's a stable paycheck, and the Army can help pay their way through college after a few years.

9.4% of Illinois Workers Are Jobless

According to the Chicago Sun Times, Illinois' unemployment rate climbed to 9.4% in April 2009--That's up 0.4 percentage points from March 2009 and up 3.2% points from April-2008's 6.2% rate---That means in one short year, there are 50%+ more unemployed workers in Illinois looking for work thant what there was in the prior year.

New York Governor Paterson Approves an Additional 13 Weeks of Tier 3 Unemployment Benefits

With the backdrop of an increasing rate of unemployment in the Empire State, Governor Paterson today signed legislation that gives jobless New Yorkers an additional 13 weeks of unemployment insurance benefits.

In April, 2009---7.8% of New Yorkers were unemployed and looking for work.

Michigan's Unemployment Rate rises to 12.9% in April

According to the Detroit Free Press the state of Michigan's unemployment rate climbed 0.3 percentage points in April 2009 to 12.9%.

I don't know if you call it a good thing or not---But in April the National unemployment rate rose 0.4 percentage points to 8.9%---So the State of Michigan's unemployment rate actually rose less than the overall US rate for the first time in months. [But--(1) This is all with in a margin of error for the monthly measurements--so it's possible that Michigan was actually worse than the national average and (2) With the pending bankruptcies of Chrysler and GM, there will likely be continued increases in Michigan's unemployment rate for May and June 2009.

Click on Chart for a Larger Image

Only 1 in 5 new college graduates have found a job

CNN's Josh Lev reports on the difficulties that college graduates are having in finding jobs.

According to the stats, only 20% of college graduates who applied for jobs got a job offer in 2009 (vs. 51% in 2007)---And only 25% of college graduates are planning on going to graduate school.

The majors that are having the easiest time finding jobs are engineering and accounting undergrads.

AP's Economic Stress Index shows where the Great Recession is hurting the most

The Associated Press has recently come out with a new tool called the "Economic Stress Index" that graphically shows by county what areas of the country are experiencing (comparatively) the toughest times.

Parts of California, the Midwest (Indiana & Michigan), and Arizona are some of the hardest hit spots in the country.

The map, which is updated monthly, is available at the AP's website

Higher Taxes to fix Indiana's busted unemployment system

With the Hoosier State being forced to borrow money from the federal government to make unemployment insurance benefit payments to the state's jobless, the state legislature has decided to increase the taxes it charges to employers in order to fund the system.

According to the Courier Press the

Currently, employers pay between 1.1 percent and 5.6 percent on the first $7,000 a worker earns, or between $77 and $392 per year.

In 2010, that will increase to between 0.7 percent and 9.5 percent on a wage base of $9,500. That's between $66.50 and $902.50.

Then in 2011, that again jumps to between 0.75 percent and 10.2 percent on the first $9,500, leaving the final range between $71.25 and $969 each year

Government Unemployment Projections way off the Mark.

Hat tip to Greg Mankiw for pointing out the fact that the federal government's forecasters have been way off the mark when projecting the unemployment rate both with and without the stimulus.

Click on Chart for a Larger View

The original government report published in January 2009 was either (1) overly optimistic with regards to the impact of the stimulus package around job creation or (2) Severely underestimated just how bad the "Great Recession" is turning out to be.

The original worst cast assumption was for the unemployment rate to be ~9%---Now it's likely that the statistic will breach 10% by July, 2009... That's a huge margin of error for only 6 months in the future from the reports publish date---makes you wonder what their confidence interval is for 2014!

GM & Chrysler to pull the plug on ~2,000 Dealerships

Back in December I posted about how bankruptcy for Chrysler and GM would negatively impact the huge dealer base that both automakers have.

Well just this week, Chrysler announced that 25% of their dealerships (~800 dealers) are being shut-down---and they're sticking those dealers with all their inventory and special tools. And today, General Motors announced that it is going to get rid of ~1,100 dealers by January.

The average dealership has close to 50 employees---but many of the small dealerships are the ones that are closing, so if you assume an average of 20 employees per closed dealership---that means at least 40,000 people are directly going to be laid off by this change and the trickle down impact will be even greater---as many dealerships are the driving force for sales tax revenues in some cities/counties.

South Carolina borrows $20million more as Unemployment nears 12%

The state of South Carolina today borrowed $20 million (more) from the federal government in order to keep the state's unemployment benefit checks coming. Click on Chart for a larger image

According to Governor Mark Sanford, the state could end up owing the feds $1 Billion dollars in the near future. That would amount to almost $225 for every man, woman and child in the state of South Carolina.

As you can see in the chart above, the state has seen it's unemployment rate almost double---from 5.9% in March 2008 to 11.4% in March 2009.

Free Viagra for the Unemployed

According to the Detroit Free Press, Pfizer is offering free medication to people who are unemployed---for up to 1 year.

This program includes viagra, lipitor and 70 other drugs---But there is a catch--you have to have been using the drug for at least 3 months and lost your job since 1/1/2009.

If you want to learn more about this program--call Pfizer at 866-706-2400.

So much for the "Second Derivative" Green Shoot...

All last week the talking heads on the news and finance channels were talking about how great it was that the second derivative of jobless claims has gone negative. (For those who have forgotten their calculus---that means they were happy that the rate of people losing their jobs and filing for unemployment had decreased from ~650,000/week to ~600,000/week.).

Well today cnn reports that 637,000 initial jobless claims were filed by unemployed workers last week--This is up 32,000 people since last weeks figure. Translation: The second derivative has turned positive (GASP!).

Continuing Claims rose to their highest level on record (since 1967) to ~6.6 million people.

Where have the Jobs Gone?

According to the Bureau of Laobr Statistics, as of March 2009 there were 2.7 million job openings in the United States. This is down 1.4 million job openings in the last year.

Click on Image for a Larger Chart

Given that unemployment has severly spiked in the last year + that means there are many more people fighting for far fewer jobs. Companies just don't want to take the risk and expand their work force---and I'm guessing that with the big supply of workers looking for employment, companies that are hiring could likely afford to pay less in wages/benefits than what they were doling out a mere 2 years ago.

Recession / Unemployment hits Social Security Hard

Today CNN reports that because of the Great Recession, the social security trust fund is likely to go bust 4 years earlier than previously expected.

Now the experts speculate that the fund will be insolvant in 2037 vs. 2041 in the prior year's forecast.

The main problems are that there is higher demand for Social Security benefits while there is less money coming in---As unemployment creeps up, FICA withholdings decline.

This pending crisis in funding of America's social programs was highlighted in last year's movie IOUSA. A short clip is shown below: And a 32 minute version of IOUSA movie is available on youtube.

Will New Yorkers get a Tier 3 Unemployment Extension?

Unemployment Extension Update: NYS - 4/20/09 - New York News and Tri-State News - 7online.com- Watch more Videos at Vodpod.

This ABC 7 news video clip addresses the concerns that 56,000 New Yorkers (1/2 of which live in New York City) are about to face once their unemployment insurance benefits are set to expire next month.

State legislators are working on a program to use the Obama stimulus package to provide another 13 weeks of unemployment benefit payments to the state's jobless.

Warning Job Loss is Bad for Your Health

Today the New York Times reported on a Harvard study that speculates that becoming unemployed is bad for your health.

The study focuses on 8,125 people and found that the rate of health issues (including high blood pressure, diabetes and heart disease) occurred almost twice as much in people who unexpectedly lost their job than people who were continously employed. This increase in health issues occurred even if people quickly found new jobs after getting the axe.

Let's hope that most of these folks were still covered by COBRA or some sort of health insurance!

As Unemployment Rate Climbs, so do Mortgage Delinquencies

Click on Image for a bigger chart

Data released from Freddie and Fannie show that the rate of serious delinquencies continue to worsen in March (Freddie) and February (Fannie).

Freddie saw a 2.29% serious delinquency rate in its single family home mortgage portfolio, while Fannie Mae saw almost 3% of it's single family home loan portfolio in the seriously delinquent category. [both of these data points are shown as bars & use the left hand scale on the chart].

Fannie and Freddie have large amounts of prime mortgages on their books and as you can see, as the unemployment rate and underemployment rate in the US continue to increase (Lines on the chart using the right hand scale), the numbers of people with prime mortgages who fall behind and run into payment problems continue to increase.

Since we can see that the unemployment continued to rise in April, 2009 I think we can safely forecast that the GSE's delinquency rate will continue to climb upwards.

If you're one of the many people falling behind on your mortgage payments there are several diffent techniques that may be useful in delaying or forstalling the bank foreclosure process.

Unemployment Rate Rises to 8.9% in April 2009--U6 Unemployment up to 15.8%

According to figures released from the bureau of labor statistics, the US unemployment rate increased from 8.5% in March 2009 to 8.9% in April 2009---losing 539,000 jobs in the process.

There are now 3.7 million people who have been unemployed for over a half year. This is up from 1.3 million people in the same position at the start of the "Great Recession" in 12/2007.

Click on Image for a larger chart

One other interesting point is the fact that even though the unemployment increased by 0.4 percentage points in the month (8.5 to 8.9%), the U6 Unemployment Rate (which includes the unemployed as well as peole working part-time b/c they can't find full time work) increased only 0.2 percentage points (15.6 to 15.8%). Now maybe I'm being a pollyanna, but this is pretty good news--It means that the number of people who were working part time work, but wanted full time work actually fell!---I hope that means they found full time work, and not that they are now just happy with their part-time careers.
Click on Image for a Larger Chart

Colorado Unemployment Line is Still Busy

Back in January, I blogged about how the state of Colorado is constantly serving up the busy signal to the jobless who need to call in to file for unemployment or to get questions answered.

Here we are 4 months later and KRDO reports that people are still getting busy signals or waiting on hold for hours---This is even though they have expanded their workforce from 20 people to 110 people in the past year.

According to KRDO, you can email Bill Thoennes (at bill.thoennes@state.co.us ) if you're not having any luck in getting your phone call answered. [Or else you could try and find your answers at www.coworkforce.com. ]

Just When WIll Ohio's Unemployed Start Collecting the Extra $25/week in Unemployment Benefits?

According to vindy.com the state of Ohio is getting close to retroactively paying the extra $25/week to the jobless collecting unemployment insurance.

The extra money was supposed to be delivered in February, but computer glitches delayed the payments until now. If you're a buckeye looking for the extra cash, you can expect in the next couple of weeks.

There will be a separate "catch-up" payment and then the extra funds should start showing up in future checks.

601,000 New Jobless Claims Last Week

According to USA Today 601,000 workers filed for initial unemployment checks last week-->This is the lowest weekly rate in over 14 weeks. And once again it is an indicator that is "less bad than expected"

The amount of workers currently collecting unemployment benefits climbed to a record 6.35 million.

ADP Jobs Report for April, Not as Bad as Expected

This morning ADP issued their jobs report for April showing that 491,000 jobs were lost in April, 2009. Well this is still bad news, it's not as bad as people expected and it's signficantly fewer jobs lost than what have been lost every month since December 2008.

Click for a Bigger Chart...

As you can see in the chart above, the number of non-farm private jobs keeps declining (Green Bars & Left Hand Axis), but the rate of Change (Blue Line & Right Axis) is showing an uptick--and that uptick is why the stock market futures are trending up this morning. Analysts are hoping that the decline in job loss will continue and eventually turn into job gains. Will it happen? Only time will tell...

What do you think?

Alternatives to COBRA health insurance

For many people looking to keep health insurance after losing their job they first look at COBRA coverage offered by their employer. For many job seekers this just affordable (especially for people who were laid off well before the Obama Stimulus Package allows for COBRA subsidies.)

For myself, I've been using Assurant Health for my health insurance provider while I'm looking for work. So far I've been pleased, and recently I signed up for their affiliate marketing program---so this post is a little bit of an advertisement.



It never hurts to cross-shop and get quotes to see if COBRA has the best deal or some other insurance company does---so for a peace-of-mind, consider getting a quote from Assurant for your health insurance needs.

109 Cities have 10%++ Unemployment Rate

According to cnn.com there are now 109 cities in the United States with 10% unemployment rate or worse---This compares to 14 cities with 10% plus unemployment last year.

The cities with the most jobless tend to be from California, they include:

1. El Centro, CA --25.1%
2. Merced, CA--20.4%
3. Yuba City, CA--19.5%
4. Elkhart-Goshen, IN--18.8%
5. Visalia-Porterville, CA--17.7%
6. Modesto, CA--17.5%
7. Bend, OR--17.0%
8. Fresno, CA--17%
9. Redding, CA--16.8%
10. Hanford-Corcoran, CA--16.7%

Is the Jobs situation getting better in Pennsylvania?

According to recent reports the number of people collecting unemployment insurance in the state of Pennsylvania has dropped by 7,000 over the last week.

According to the Department of Labor, now ~364,000 Pennsylvanians are recieving benefits---while that number is around twice as bad as last year, the fact that it's down from the prior week is actually a good sign.