Analysts Surprised (Again) by Increased Jobless Claims

Analysts were again surprised (so what else is new) by the increase in the number of jobless claims. Analysts had expected claims to ease to 452,000; in fact, it rose to 472,000, not an insignificant number. And just yesterday I posted this:

• Analysts estimated there would be an increase of 60,000 private sector jobs in June, 2010. The report has just been released .... drum roll ..... 13,000 (released June 30, 2010)
• Census jobs end this month  (June, 2010)
• Stimulus money running out which will result in more jobs lost (mostly at state and local government level).
• Federal government won't be seeing any huge increase in numbers.

The story mentions "uncertainty" that firms face in hiring new employees. The 800-pound gorilla in the room: Obama health care. Plus the fact that the administration is anti-business.

Why the unemployment rate is dropping (it ain't good news).

In related news, 1.3 million jobless will not have benefits "restored." Congress has left for its Independence Day vacation. "Restored" is an interesting word. A more appropriate word would be "extended" as in extend benefits longer than 99 weeks. Yes, unemployment  benefits now extend out to 99 weeks. Without the extension, 200,000 who have not worked for at least 26 weeks will come off the jobless benefits rolls every week. Four months to the end of October, works outs to about 3.2 million more without jobless benefits adding up to a total of 4.5 million, out of the 11 million or so unemployed, going into the November elections.

Elsewhere, the city of Los Angeles will not delay layoffs: they begin today. This affects mostly library and child care employees.  Stimulus money is running out and we are now going to see the effects of using stimulus money to simply extend the inevitable instead of a comprehensive stimulus program to generate an entirely new industry or expand existing needed industries.

And the state of California begins the budget year with no budget. Thousands of folks are at risk of getting paid by the state starting today because the politicians cannot come together on a budget deal. I guess that's one way to solve a budget crisis: suspend payments to creditors.

The state of Massachusetts just signed their budget law that will slash thousands of jobs. The governor mentioned the "stalled" Federal stimulus money payments. Oh, my.

Nationwide, pending home sales plummeted a record thirty (30) percent. Clever, but temporary, manipulation of the tax code has expected consequences. However, I find this interesting: when Congress wants to spur a specific industry, what does it do? It cuts taxes. Now, if one wanted to spur industry across the board, what would be the logical thing to do? Are we smarter than a fifth grader?

And the bad news just gets worse: the June "manufacturing index" also declined. Stimulus money is starting to fizzle out.