The DoL has just issued the most current unemployment stats for June and it is 9.5%. The interesting factor is its annualized rate of change which is now down to 1%. This may be a one month anomaly but if it holds then we may likely see only 10% peak not the anticipated 10.5%. Clearly this Recession is not as bad as many others and clearly not as bad as the current Administration would like us to believe. We are still concerned as regards to the growth in M2 and the Feds balance sheet because this may mean the Fed will clamp down o interest rates and repeat the recession of the early 80s.
The other DoL data released is summarized below:
| Consumer Price Index | +0.1% |
| Unemployment Rate | 9.5% |
| Payroll Employment | -467,000(p) |
| Average Hourly Earnings | +$0.02(p) |
| Producer Price Index | +0.2%(p) |
| Employment Cost Index | +0.3% |
| Productivity | +1.6% |
| U.S. Import Price Index | +1.3% |
| Unemployment Initial (UI) Claims | 614,000 |
| UI Claims 4-Week Average | 615,250 |
| Federal Minimum Wage | $6.55 |
The CPI increase is not bad and it shows a continual trend away from deflation which many had considered and the import price increase is possibly reflective of some long term trends in increased CPI. As with so many of these stats the standard models may have little if any merit in this case.
However my view is positive whereas the NY Times reports this as a negative since, although the rate of increase of the rate decreased dramatically, the total number increased. I find this rather interesting. If you took my position you would conclude that things are getting better despite the fact that the stimulus was not even taking effect. Whereas if you read the Times you would conclude you need more stimulus. Strange to see the difference but so why am I not surprised! Welcome to macroeconomics, where like Alice we can make a number mean anything we want it to mean, or as I have often said thank God macro-economists do not design bridges! But yikes, they are now into health care.......
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