Stocks fell hard in morning trade on a supposedly unexpectedly weak unemployment claims report.
Productivity jumped 6.2% in the 4th quarter, less than expectations but a solid number that lends credence to the related GDP figure and marks the 3rd consecutive quarter of +6% productivity gains. Unit labor costs plunged 4.4% great for corporate profits, all together one of the more positive economic reports I’ve come across lately.
The increase of 8,000 initial unemployment claims ostensibly spooked the market this morning; I suppose it’s as good a lame excuse as any. The 4-week moving average jumped 11,750 to 468,750 a 4th consecutive increase. Indeed the recent reversal of trend relevant to unemployment claims is the real worry and with the official jobs report out tomorrow expectations are that will see increasing job losses. Additionally with the annual net/birth death statistical model revision on tap and expectations that this will erase 825,000 odd jobs from last years figures the employment trends both immediate past and present aren’t pretty.
Ultimately of course it’s about jobs and real economic recovery just isn’t going to happen until we start to replace some of the job losses over the last few years. Those on unemployment number 4.6 million while those collecting emergency benefits runs 5.6 million, add the 2 together and its 10.2 million folks on some form of unemployment benefit so its no wonder state funds for these programs are going broke leading to borrowing.
The SEC couldn’t do its job relative the Madoff affair, nor could it manage to do its job relative to the B of A/Merrill deal. NY AG Andrew Cuomo has stepped in with a civil suit charging fraud by B of A’s execs including ex CEO Ken Lewis, while the SEC continues to try and paper over the whole mess with yet another settlement offer.
