Jobless Caught in Pseudo Recovery
By Dirk van Dijk of Zacks.com
NEW YORK (TheStreet) -- Initial claims for unemployment Insurance climbed by 12,000 last week to 465,000. That is the first increase in five weeks.
Since claims can be volatile from week to week, it is better to track the four-week moving average to get a better sense of the trend. It declined by 3,250 to 463,250. After declining sharply in the second half of 2009, the four-week moving average has been stuck in a tight trading range.
Just over a month ago, the weekly number hit 500,000 and threatened to break out to the upside from the range, but the decline over the last month brought us down to 450,000 (before being revised up to 453,000), which brought hopes that we might be breaking out to the downside.This week's numbers seem to indicate that neither the hope -- nor the fear -- was justified. We seem to be stuck in a pseudo-recovery. The economy is growing, but not at the sort of rate needed to add a significant number of jobs and to put a dent in the huge army of the unemployed. In hindsight, the run-up to 500,000 seems to be mostly a function of the Census workers being laid off (they are almost all gone now, and the Census was completed quicker, and at less cost than anyone had expected). As that effect waned, we returned to the previous baseline. Relative to a year ago, the four-week moving average is down by 89,000 or 16.1%.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV