Wages & Salaries Hit A Record High

The reason we started this website is to follow financial markets and the economy based on all available data and perspectives. We didn’t want someone feeding us a story. As a result, this by itself makes our content lack sensationalism. That’s good if you want to know what is really going on, and bad if your objective is to have more readers, but that’s neither here nor there. You wouldn’t want someone only showing you what supports their perspective or previously held views. Therefore, even though we have put out the possibility of their being negative job creation in December, just two days ago, we will discuss the surprising sharp fall in initial jobless claims in the week of December 19th. Firstly, let’s mention last week’s report was even worse than initially shown as claims were revised up 7,000 to 892,000. This week claims fell to 803,000 which was below estimates for 875,000. Economists mostly expected a continuation of the weakness, but instead there was a sharp drop in claims.

It’s not as if this decline was caused by the seasonal adjustment. Non-seasonally adjusted initial claims fell from 942,000 to 869,000. For at least one week, initial claims got better. It’s worth mentioning a large portion of this drop was in California which is known for having suspect data. It stopped accepting claims earlier this year to get rid of some of the fraud. There was a 48,000 decline in California.

Furthermore, there was a decline of 18,000 in New York. Given the large decline in high frequency data in New York, this is surprising. It could be a one week wonder. Then there was a 7,000 decline in Texas. We don’t expect an uptick in claims when the $300 in extra benefits start going out. That adds up to about 85% of normal pay. People want to work, not get slightly less pay for 11 weeks and then get cast aside by the government. It’s worth mentioning, the bill has been delayed by Trump’s call for a $2,000 check instead of $600 which was soundly rejected by Republicans in Congress.

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