As usual, the economists on Wall Street have been spending too much time on the golf course rather than crunching the numbers. They were expecting unemployment claims to decline last week.
Specifically, Wall Street economists, on average, had expected first-time claims for unemployment benefits to decline by 7,000 for the week ended April 2, 2010. Instead, claims rose by 18,000 to 460,000 during the week, up from 442,000 claims during the previous week.
As you can see from the chart below, the net planned hiring by U.S. businesses has clearly indicated since the beginning of this year that the employment situation in this country was on the verge of deteriorating and that claims for unemployment claims would soon trend higher.
U.S. employers had stated during each of the past three months that they planned to terminate more jobs than they planned to create during the ensuing months.
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In addition to telling economists that they’ve been planning since January to soon increase their number of job cuts, the chart below illustrates that employers have planned during the past couple of months to hire less workers in the months ahead.
Not surprisingly (at least to some of us), online postings of job ads declined during each of the past two months.
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Apparently, most of the so-called Wall Street “experts” either are unaware of these statistics or they decided to ignore then, likely because they had never read about such statistics in an economics textbook.
Whatever the case might be, the fact that employers throughout the United States have planned during the past three months to soon begin to reduce their workforces, and that employers posted fewer and fewer job ads during the past couple of months, clearly indicated that unemployment claims would soon turn higher.
That’s a very significant development because fiirst-time claims for unemployment benefits historically have been a very reliable leading economic and stock market indicator.
Specifically, economic conditions have deteriorated and stock prices have fallen sharply following increases in unemployment claims.
Unlike the so-called “experts,” I’m very aware of this fact. That’s one of the reasons that I recently began to advise subscribers to my investment advisory services to exit the stock market and to begin to allocate a larger portion of their money to cash-like securities.
if you’re interested in learning about those services and how to generate profits during both up and down markets.
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