{"id":1735,"date":"2020-05-14T14:17:10","date_gmt":"2020-05-14T18:17:10","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1735"},"modified":"2020-05-14T14:17:10","modified_gmt":"2020-05-14T18:17:10","slug":"weekly-jobless-claims-and-april-import-and-export-prices","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1735","title":{"rendered":"Weekly Jobless Claims and April Import and Export Prices"},"content":{"rendered":"\n

KEY DATA:<\/strong>  Claims: 2.98 million (down 195,000);\nContinuing Claims: 22.83 million (up 456,000)\/ Import Prices: -2.6%; Fuel: -31.5%\/\nExports: -3.3%; Farm: -3.1%<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cNew unemployment claims remain at\nextraordinarily high levels and the modest decline points to an extended deterioration\nin the labor markets.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  New claims for unemployment insurance eased\na touch last week, but the deceleration in the rate of filings was\ndisappointing.<\/em><\/strong>  The level remains\nin the three million range and has been there or above for eight weeks\nnow.  Over that time period, 36.6 million\npeople have filed for unemployment compensation.  Not every person who files receives\ncompensation and right now only about sixty percent who have filed have made it onto the\nrolls.<\/em><\/strong>  It looks like there is a major\nbacklog that states still have to get through.<\/em><\/strong>  That is bad news but also good news.  Too many households don\u2019t have money to\nspend, but once they start receiving the checks, consumption should pick\nup.  Maybe more importantly, as\nthe backlogs disappear, the continuing claims number could take center stage.  With the economy reopening, that number will\nprovide a weekly indication of how well the back-to-work process is reducing\nthe number unemployed.<\/em><\/strong><\/p>\n\n\n\n

Prices for lots of things keep coming down, at least\nthat is what the government data claim.  Import\nprices dropped sharply in April<\/em><\/strong>, but as we saw with consumer and wholesale\ncosts, most of that was in energy, where prices simply cratered.  Imported consumer goods costs were off\nmodestly as food prices dropped.<\/em><\/strong> \nBut vehicle and capital goods prices were up.  On the export side, the farm sector\ncontinues to be battered as the prices of the goods they sell fell again.  <\/em><\/strong><\/p>\n\n\n\n

IMPLICATIONS:<\/strong>  About the only good thing about recessions\nis that prices generally don\u2019t go up and often they fall.<\/em><\/strong>  But that is usually a short-term phenomenon\nthat is followed by a steady recovery back to more normal inflation.  The problem facing the Fed is that its\n\u201cnormal\u201d of 2% had been hard to reach since the Great Recession.  So running into a massive economic collapse\ncannot help in its drive to revive inflation. <\/em><\/strong> Right now, low inflation is not the Fed\u2019s\nnumber one concern.<\/em><\/strong>  However,\nwhile it was pretty much back to 2% earlier this year, the progress has been\nlost.  Since deflation is the major fear\nfor developed nations, the focus of attention will shift quickly once the\neconomy is well on its way to opening up completely.  Just as the peak in the unemployment rate\nwill determine how difficult it will be to get the labor markets back to a\nreasonable position, the inflation rate nadir will determine the difficulty in\ngetting inflation back to a desirable rate. <\/em><\/strong> Simply put, the lower the rate, the longer\nthe Fed will have to keep rates at rock bottom. \nThat is something investors should keep in mind.  <\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA:  Claims: 2.98 million (down 195,000); Continuing Claims: 22.83 million (up 456,000)\/ Import Prices: -2.6%; Fuel: -31.5%\/ Exports: -3.3%; Farm: -3.1% IN A NUTSHELL:  \u201cNew unemployment claims remain at extraordinarily high levels and the modest decline points to an extended deterioration in the labor markets.\u201d WHAT IT MEANS:  New claims for unemployment insurance eased … Continue reading Weekly Jobless Claims and April Import and Export Prices<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,1],"tags":[],"class_list":["post-1735","post","type-post","status-publish","format-standard","hentry","category-economic-indicators","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1735","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1735"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1735\/revisions"}],"predecessor-version":[{"id":1736,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1735\/revisions\/1736"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1735"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1735"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1735"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}