[Marxism] Wall Street Journal's Confirmation of the Labor Theory of Value
johnaimani at earthlink.net
Thu Mar 12 23:13:34 MDT 2009
Jobless claims work well as recovery proxy
BY Mark Gongloff,
The Wall Street Journal
There are no foolproof indicators of economic turning points, but weekly jobless claims come close...
A fresh reading on the number of people applying for unemployment benefits is due from the Labor Department on Thursday morning. Economists, on average, think new claims edged up to 645,000 from 639,000 a week ago.
The four-week moving average of claims, which smooths out weekly undulations, is the highest level since October 1982. At last count, more than five million people were drawing benefits for a week or more, a record high number of so-called continuing claims.
A lousy job market is no shocker. But jobless claims are highly attuned to other aspects of the broader economy and bear watching. Deutsche Bank chief U.S. economist Joseph LaVorgna calls them "a proxy" for gross domestic product. When continuing claims go up, GDP moves in the opposite direction, Mr. LaVorgna points out, and at the moment backs up his rather frightening forecast of an 8% annualized rate of decline in real GDP this quarter.
Claims also inversely track industrial production and corporate profits, notes Citigroup economist Steven Wieting, particularly during downturns. In the past 40 years or so, claims have begun to recover from deep slumps in tandem with corporate profits.
"While this would be a mere coincidental indicator of subsiding declines in U.S. output," Mr. Wieting recently told clients, "it may be what markets need amid very poor confidence in potential recovery."
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