Initial claims for state unemployment insurance benefits fell 24,000 to a seasonally adjusted 601,000 in the week ended June 6, the Labor Department said. It was the fourth straight week the number of claims declined or were unchanged.
While this number is in line with my forecast that the recession is over/or near over, these numbers must be viewed cautiously, since they are "seasonally" adjusted At this time of year the seasonal adjustment can be significant, since in some states teachers are counted as unemployed once the school year ends. In the past, the Labor Department has had trouble adjusting properly for this factor. The numbers have a "good feel" to them this time around.
The number of actual initial claims under state programs, unadjusted, totaled 576,695 in the week ending June 6, an increase of 76,312 from the previous week.
Mr. Wenzel,
ReplyDeleteWhile I was aware of Austrian economics for the past 4 years, I only began taking it seriously after all their predictions came to pass.
Several Austrians including people like Peter Schiff and yourself call for high price inflation (hereafter inflation), perhaps even hyperinflation. How does that view gel with your view that the recession is over? We all know how devastating high inflation can be on gross output.
Could it be just a temporary recovery/stabilization in output that ignites the inflationary stage before output falls again or is it possible to enter the inflationary stage without stabilization?
I'm convinced, as you are, that there is no way out of this quagmire without a majority of people hurting. Either the Fed allows interest rates to rise and chokes off the money supply causing all the banks and several levered businesses to fail or we print money like crazy and still kill the economy via hyperinflation or as I term it, the heat death (astronmical term).
Also, maybe you can help me. Why was there no price inflation in Japan despite quantitative easing for years? Was it because they ran trade surpluses and there were rivate savings and most yen borrowings were by foreigners playing the carry trade (or a combination of these factors).
I'm finding it a bit difficult to explain to my friends why the U.S. would experience high price inflation rather than Japan like price deflation.
Thank you.
I always put "recovery" and "recession" in quotations to emphasise that although the data will reflect "recovery", it is a recovery because of Fed money printing which will lead to price inflation.
ReplyDeleteIt is difficult enough for me to understand the U.S. economy. I find it remarkable the number of non-Japanese economomists who attempt to tell us that the current situation in the U.S. is like that in Japan. How much time have they spent studying the Japanese culture and exactly how the money supply operates in that country? Given that I can count on one hand the number of American economists who are even aware that the Fed slowed money during the summer of 08, I take everything they say about Japan with a huge supply of salt.