John Lounsbury
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Stress Tests Were Definitely Stressful Enough [View article]
Well argued, but I have to disagree. You repeatedly mention economic readings "better than expected", when it would be more correct to say "less disasterous than expected". For example, since when are 600,000 weekly initial unemployment claims good news? The latest week exceeded that level. If we had 500,000, that would still be bad news. Now, if it was 300,000, that would be good news.
There are so many measurements of unemployment that are in uncharted territotry (at least for the past 60 years) that making projections about unemployment is fraught with hazard. Early indicators that a recession might be ending have not yet supported the recent signal from a peak in weekly initial unemployment claims (April4). Among these, the insured unemployed number is still rising and the average weekly hours worked in manufacturing is still falling. The number of people working part-time for economic reasons ("forced" part-time, as opposed to part-time by choice) is 50% higher than ever before (possibly 100% higher due to a measurement change at the end of 1993). The average duration of unemployment is much higher than ever before. And all of these statsitics are on steep slopes in the wrong direction. Only the weekly claims number has become "less bad".
I repeat that my comments apply to data since World War II. The Great Depression was probably worse, but much of the detailed employment data we have today has a history of 40 to 60 years.
If I haven't bored you enough, there is more on my Instablog seekingalpha.com/insta...