{"id":276,"date":"2009-11-05T10:03:00","date_gmt":"2009-11-05T15:03:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=276"},"modified":"2018-08-21T17:08:05","modified_gmt":"2018-08-21T21:08:05","slug":"up-up-and-away-2","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2009\/11\/05\/up-up-and-away-2\/","title":{"rendered":"Up, up and away!?"},"content":{"rendered":"

Last week saw initial jobless claims fall<\/strong> 20,000 to a level of 512,000. The 512K is the lowest number of filings since January of this year. Remember that this data is always estimated (look at how round the figures are) and hence, very volatile. In fact, the data are constantly revised as proof rolls in to substantiate, or refute, assumptions. Consequently, the better way to look at this data is always on a 4-week moving average. The 4-week moving average saw jobless claims fall by 3,000 to 523,750. That is the lowest level since January 10th<\/span>.<\/span><\/p>\n

While these statistics sound impressive, there is one even more impressive statistic that indicates to me that the job market is about to improve and dramatically<\/strong>. “What is that,” you ask? Productivity.<\/span><\/p>\n

Why employment is about to improve dramatically<\/span><\/strong>:<\/span><\/p>\n

The Labor Department reported that productivity in the third quarter rose a stunning 9.5%! OK, some info about how productivity is counted is in order. Basically its “output divided by the number of workers.” So if output is up, as GDP was in the Third Quarter, but employment is down, as it was in the Third Quarter, then productivity rises. Productivity is a more preferred measure of what I have been calling real<\/em> economic growth. However, there is a flaw in the usual interpretation of the number. Namely, 9.5% productivity growth is not sustainable. Why not?<\/span><\/p>\n

The real reason that productivity is up 9.5% is that folks who remain employed are being worked to the bone. Salaried employees are working non-paid overtime. Breaks are shorter. Stress is higher. Etc. Remember, when laying off employees, businesses try and lay off high salaries, but also the marginal job, or marginal employee. That means that most businesses have their core, preferred employees in place. Businesses also know that they cannot abuse their relationship with their preferred employees indefinitely. To release the pressure in the system businesses are going to have to hire new employees soon. So the crazy high productivity growth is an indication that employers are going to have to start adding jobs soon. Does this make sense?<\/span><\/p>\n

A New Prediction<\/span><\/strong>:<\/span><\/p>\n

Because retail sales were also better than expected, though mixed, in October it is likely that the Christmas holiday sales season will be better than expected; but not by much. However, it should be enough to give businesses, both retail and manufacturing, to increase employment. Previously on the blog I had said that I thought it would be 18 months (starting at the end of the third quarter) until employment was back to more normal levels (c. 6% unemployment). The surge in productivity indicates to me that unemployment should improve a little faster. I am now guessing that we are 15 months away from a 6-7% unemployment rate. Amen!<\/span><\/p>\n

Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Last week saw initial jobless claims fall 20,000 to a level of 512,000. The 512K is the lowest number of filings since January of this year. Remember that this data is always estimated (look at how round the figures are) and hence, very volatile. In fact, the data are constantly revised as proof rolls in […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-276","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/276","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=276"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/276\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=276"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=276"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}