You shouldn’t like the looks of this chart.
Initial claims, one of the best pieces of high frequency data we get, is back solidly on the rise with today’s bad 428K print. That’s up from an upwardly revised 417K.
Meanwhile, this rise is coming after the goose-egg August Non-Farm Payrolls report, which has to make you wonder whether there was/will be any positive job creation at all in September.
This note from POLITICO’s Morning Money today rings true:
HIRING TO GO NEGATIVE SOON? – Harris Private Bank’s Jack Ablin in a client note: “CEO sentiment, as measured by Chief Executive Magazine, is slipping. Senior executives make hiring decisions and CEO confidence tends to lead hiring by about two quarters. Worries in the executive suite could spell trouble in the jobs market. Unless attitudes improve, expect year-over-year hiring to turn negative sometime early next year.”
We’re not sure what year-over-year hiring means, exactly, but the point about the lack of big hiring decisions, emanating in part from CEO confidence, certainly makes sense.
In the latest sign of corporate skittishness, it was reported that Citi has a virtual freeze on hiring.
If you want to be vaguely optimistic, here’s Nomura, suggesting that seasonality around these times is as distorting as it ever gets.
The Department of labour reported 428k new claims for unemployment insurance for the week ending 10 September, increasing from an upwardly revised 417k claims the week prior. The Department of labour reported that the numbers were not impacted by hurricanes. While they are relatively clean in that regard, the 10 September week included the labour Day holiday and as a result had a strong upward seasonal adjustment (since there are fewer days for people to file claims). In fact, the seasonal adjustments during the most recent week are the strongest of any week in the year and as a result are not too reliable. Even though the non-seasonally adjusted (NSA) claims declined 22.5k, the seasonal adjustment ramped up the number of NSA claims by 31.4% to get 428k. The four-week moving average of jobless claims, which is a more reliable metric than an individual week’s figure, has increased in each of the past four weeks and reached 419.5k in the most recent week—16k higher than during the survey period for the August employment report (next week’s report represents the survey week for the September report).
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