The False Claims and Exaggerations of Permabulls.

There has been a gradual progression in the premabulls line of argument over the last 6 months. Firstly any suggestion that the stockmarket may tank and the economy slide into recession was simply laughed at. Then when negative economic data started coming in the permabulls would counter by pointing at the positive data. Now that there is no positive data they have started to make things up.

Take Don Luskin of Trend Macro and frequent Kudlow & Company contributor. This guy is not stupid, in fact he is articulate and quite often witty. He usually conducts himself in a calm controlled manner, however on occassion he loses it. You can tell when he's on the verge of losing it because he becomes almost hysterical, making wild gesticulations and speaking in a condescending, sarcastic tone.

A great example of that was on Friday 28th March on Kudlow & Company. Luskin, obviously battered from the reality of an ailing economy and stockmarket launched into a tirade about why he is bullish. This is what he managed to spew forth;

"Here's something for your ahhh Kudlow 101 recession watch that I think really tells the story. If we're in recession it probably started in December, if." "We're running you know what, the last payroll jobs report we lost 40 thousand jobs that month and jobless claims are running about 350, 360 thousand." "Normally when you're 3 months into a recession jobless claims are 550 thousand, normally payroll job losses are 250 thousand."

If the above were true I would agree that he has a fair argument in favour of a 'no recession' call. However not only is it not true, it's not even close. Let's take a look at the claim that normally 3 months into a recession intial jobless claims are 550,000 and job losses are -250k.

Luskin's argument rests on the assumption that a recession started in Dec-07 which is not at all clear but let's go along with that assumption for the sake of argument. Below is a table of the last 6 US recessions. Unfortunately I don't have the data on Jobless claims prior to 1980.




The jobless claims number is the 4 week moving average. So for example, the 395,000 number related to the March 2001 recession refers to the 4 week MA of inital jobless claims in June 2001. As you can see the only time it came close to Luskin's claims was in the shallow recession that started in July 1981 with the jobless claims 4 week MA reaching almost 530k 3 months later. The deep recession that started in July 1982 fell just short of the 500k mark whilst the last two recessions in 1991 and 2001 came nowhere near the 550k level Luskin suggests.

Currently the 4 week MA of jobless claims is around 360k so Luskin could have pointed out that jobless claims are running lower than where they normally are at this point in a recession (if it did in fact start in December) but instead he resorted to gross exaggeration.

How about the -250k job loss claim? As you can see from the table above that is not just an exaggeration, it is an outright lie. I've included both the change in non-farm payrolls and the 3 month MA change as the month on month change can be very volatile.

As you can see, in 2 out of 6 recessions shown, payrolls were actually showing gains while in 3 out of 6 the 3 month MA was positive. Payroll losses have never been -200k let alone -250k 3 months into any of the last 6 recessions. Currently payrolls are already in negative territory (Jan -22 Feb -63) and whilst we don't yet have the March non-farm payroll number, the 3 month MA is already negative at -15k.

So whilst jobless claims do look on the low side, changes in non-farm payrolls are bang in the middle of the range of the last 6 recessions. Either Luskin doesn't know the data very well or he is telling outright lies. I suspect it is the latter. He actually remains relatively restrained up to that point but then he really let's go with a very Luskinesque performance. I think I captured it well in the image below.

Funnily enough, after making blatantly false claims, later in the program Luskin accuses John Brown of "throwing numbers around like crazy," more particularly with respect to potential real estate losses. Brown then puts him in his place by pointing out that he got his numbers from the foremost expert on housing, Robert Shiller.

It really is a desperate, sad performance from Luskin. But don't take my word for it. Click on the image below for the entire segment.

Jobless Claims Tick Higher

Last month I noted that Jobless claims were yet to rise to alarming levels. That may have changed yesterday with the highest jobless claims number for about 8 months. From marketwatch.com

Number of Americans on unemployment nears two-year high

Continuing jobless claims - the total number of individuals collecting unemployment benefits -- rose by 112,000 in the week ending Nov. 17, to 2.66 million, the highest mark since Dec. 24, 2005, the Labor Department said.

Initial jobless claims - individuals applying for unemployment benefits for the first time -- also shot up in the latest week, the data show. Those claims rose by 23,000 to 352,000 during the week ending Nov. 24, their highest level since Feb. 10.

"This is the first time initial claims have broken 350,000 since February and thus perhaps an early sign of a more severe deterioration in the labor market," said Andrew Gledhill of Moody's Economy.com.

"At the moment, these two indicators are consistent with weakening labor market conditions," said Joshua Shapiro of MFR, Inc.

The four-week moving averages for both initial claims and continuing claims also edged up in the latest surveys. The four-week average of initial claims rose by 5,750 to 335,250, the highest since March 3. The continuing claims average climbed by 20,500 to 2.59 million. That number was the highest since Jan. 1, 2006.

Economists say the averages are a better indicator because they smooth out one-time events like holidays or strikes.

The graph above is the 4 week average of initial claims. As you can see it is hardly recessionary yet but it is starting to move up toward that 350,000 range. A few more weeks of 350,000 initial claims would lend support to a further deterioration in employment growth.

The Fed will be watching jobless claims as well as next week's NFP report for signs that they need to cut interest rates on December 11th. The bond market already has a quarter point baked in and is moving toward 50bps. Fed speak over the last few days also lends credence to the bond market's predictions. It will be an interesting couple of weeks between now and the next Fed meeting.

US Jobless Claims HIt Fresh 26 Year Highs

US initial jobless claims hit a fresh 26 year high in the latest week. Initial Claims hit 573k, the highest level since November 1982.

Continuing Claims also rose sharply in the latest week to 4.43 million, the highest level since December 1982. It is worth noting that the workforce is larger than it was in 1982, so that should be kept in mind when comparing to prior periods. That said, as claims continue to rise we can expect more nasty employment reports in the months ahead.

From November 1981 through January 1983, the 4 week moving average of intial jobless claims averaged over 500k. So far in this recession intial claims have been over 500k for just one month. Those looking for an abatement in jobless claims as a sign the economy is turning around, will be waiting for some time.

Initial Jobless Claims Hit 7 Year High

I used to often post about US initial jobless claims when trying to demonstrate why the US was heading for recession. I haven't done so for some time because it is obvious to all and sundry that the US economy is in a deep recession.

In the latest week to November 8th, intial jobless claims rose to 516,000, the highest since September 2001. Continuing claims hit 3.897 million, the highest level since January 1983.

If this recession is going to be as bad as the early 1980's we should expect intial claims to exceed 600k and continuing claims to punch through 4.5 million. KWhilst the employment data is backward looking it pays to keep an eye on the weekly jobless claims number as it is the most current barometer of employment conditions.

Initial Jobless Claims Highest Since 1992

Last week US intial Jobless claims hit a 7 year high, just one week laterand they hit a 16 year high. Initial Jobless claims hit 542,000 in the week of November 15th pushing the 4 week moving average through the 500k mark. I've extended the graph above back 10 years to show how high jobless claims got in the nasty recession of the early 1980's.

Turning to continuing claims, in the latest week they punched through the 4 million level, the highest level since December 1982.


Forecasts of double digit unemployment in the US would need to see intial claims push through the 600k mark stay there for some time, whilst continuing claims would head up through 4.5 million. we are not there yet, but it can't be ruled out in the current environment

Initial Jobless Claims Soar

With a dearth of positive economic data, the bull market cheerleaders have been pointing to the low initial jobless claims numbers in recent weeks as an indication that the labor market is still relatively healthy. This week's numbers suggest the permabulls have one less straw to clutch at as evidence the US economy is not screeching to a halt. from the US department of labor:

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending Jan. 26, the advance figure for seasonally adjusted initial claims was 375,000, an increase of 69,000 from the previous week's revised figure of 306,000. The 4-week moving average was 325,750, an increase of 10,250 from the previous week's revised average of 315,500.

The advance seasonally adjusted insured unemployment rate was 2.0 percent for the week ending Jan. 19, unchanged from the prior week's unrevised rate of 2.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Jan. 19 was 2,716,000, an increase of 47,000 from the preceding week's revised level of 2,669,000. The 4-week moving average was 2,705,000, a decrease of 9,500 from the preceding week's revised average of 2,714,500.

This week's data marks the biggest increase since Hurricane Katrina in 2005. The 4 week average remains relatively low at 325,750. Remembering the lesson John Maudlin gave on seasonally unadjusted number shows that unadjusted claims actually fell this week. So again, the seasonal factors are weaving their magic and therefore the seasonally adjusted number should be taken with a grain of salt.

After a positive ADP report yesterday, today's initial jobless claims throws a spanner in the works before the nonfarm payrolls report. Tomorrow should be an interesting day for the most over-hyped and unreliable piece of economic data of the month.

Jobless Claims Hit 7 Year High

Whilst a lot of attention is focussed on the passage of bailout mark II, US economic data continues to deteriorate. Initial Jobless Claims hit their highest levels since September 2001 at 497k. The 4 week moving average hit a 6 and half year high at 474k.



Continuing Claims hit a 5 year high 3.59 million. Some 45k of the intial claims are attributed to Hurricane Gustav. Even deducting that number, jobless claims are clearly in recession territory.

Of course everyone will be wating for the House vote on the bailout bill tomorrow, however pay attention to the payroll numbers and ISM services index because once the euphoria of the bailout bill wanes, the focus will return to the economic data and earnings.

My feeling has been for a while that the US stockmarket is in a state of denial with respect to the economy and earnings, that is that it has not fully discounted a recession and its effects on company earnings. When that reality sinks in it will pave the way for new lows.

Jobless Claims yet to sound alarm bells

From the US Department of Labor:

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

In the week ending Oct. 27, the advance figure for seasonally adjusted initial claims was 327,000, a decrease of 6,000 from the previous week's revised figure of 333,000. The 4-week moving average was 327,000, an increase of 1,750 from the previous week's revised average of 325,250.

This one of the indicators to watch to see if the US labor market is deteriorating. As you can see jobless claims remain relatively subdued. The 4 week average would have to push through the 340,000- 350,000 level to raise any real concerns.

The consensus view seems to be that after yesterday's 25 basis point rate cut that the Fed is done cutting interest rates for a while. However if jobless claims begin to rise, non farm payroll growth deteriorates further along with a slowing in the consumer spending the Fed may not be done just yet.

US Jobless Cliams Hit Fresh 4 Year Highs

The 4 week moving average of Initial Jobless claims hit their (excluding the hurricane Katrina blip) highest level in more than 4 and a half years at 378,250.

Continuing claims also hit levels not seen in almost 4 and half years at 3.1 million. Claims have pulled higher in recent weeks after being in a range for a couple of months.

The chart below comes from Paul Kasriel at Northern Trust and shows the Conference Board survey of whether jobs are hard to get. Let's see what Kasriel has to say about this particular indicator;

The spread between the percentages of respondents saying that jobs are hard to get minus the percentage saying that jobs are plentiful hit its highest level since December 2003. Chart 3 shows that there is a high correlation, 0.87, between this spread and the level of the unemployment rate. So, you might want to prepare for some pyrotechnics on Thursday morning, July 3.

With jobless claims inching higher and with US workers saying that jobs are harder to get, we may start to see some triple digit declines in non-farm payrolls in the months ahead.

US Jobless Claims Hit 26 Year Highs

The 4 week moving averages for both intial Jobless Claims and Continuing Claims hit fresh 26 year highs in the latest week. Note the shaded area that has been added to the right hand side of each graph since the NBER offically announced the start of the recession earlier in the week.


There has been little doubt about the fact that the US economy has been in recession for months (except for a few pollyannas on CNBC, more on that later). The question now is how bad it will be . There are increasing comparisons to the recessions of 1982 and 1974, I think that comparison is a valid one and talk of the new great depression is exaggerated.

There is increasing talk about how the stock market looks forward and will turn up before the end of the recession. Somehow when that platitude is repeated people conveniently omit the 2001 recession after which stock prices did not recover for more than 12 months. MY guess is that the recession will be longer than most think, probably lasting for the bulk of 2009 and that the stock market will have a few more false starts before a bottom is found.

Initial Jobless Claims Punch Through 350,000

Last week I said we should expect the 4 week moving average of Initial Jobless Claims to punch through the 350,000 mark. That's exactly what happened in the latest week. From the Department of Commerce:

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending Feb.16, the advance figure for seasonally adjusted initial claims was 349,000, a decrease of 9,000 from the previous week's revised figure of 358,000. The 4-week moving average was 360,500, an increase of 10,750 from the previous week's revised average of 349,750.

The advance seasonally adjusted insured unemployment rate was 2.1 percent for the week ending Feb. 9, unchanged from the prior week's unrevised rate of 2.1 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Feb. 9 was 2,784,000, an increase of 48,000 from the preceding week's revised level of 2,736,000. The 4-week moving average was 2,752,500, an increase of 28,750 from the preceding week's revised average of 2,723,750.

The 4-week MA excluding hurricane Katrina, is at it's highest level since Feb 2004. Interestingly last week's numbers were revised up from 349,000 to 358,000. Interesting because revisions are usually small.

To be clear there is nothing magical about the 350,000 level. From the chart above you can see that the 4-week MA briefly rose to the 390,000 level in 1996 without a recession. A sustained level of over 400,000 would be needed to confirm a recession. However, waiting for the data to confirm is of little help. Combined with other economic data I think the recession call is an easy one to make.

4 Week Avg Intial Jobless Claims Highest in 2 Years

From the Department of Labor:

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending Dec. 1, the advance figure for seasonally adjusted initial claims was 338,000, a decrease of 15,000 from the previous week's revised figure of 353,000. The 4-week moving average was 340,250, an increase of 4,750 from the previous week's revised average of 335,500.

The last time the 4 week moving average for initial jobless claims pushed through the 340,000 mark was in the week ending October 29th 2005. As noted last week the trend is commensurate with a slowdown in employment growth but is far from recessionary.

However the trend is at odds with the ADP employment report released yesterday that showed the biggest growth in private sector jobs since November 2006. That makes tomorrow's BLS Non-farm payroll report all the more interesting.

Initial Jobless Claims tick higher

Whilst not reaching alarming levels yet the 4 week moving average of jobless claims continues to creep higher suggesting the labour market is not as healthy as the pollyannas would have us believe. From the Department of Labor:

In the week ending Dec. 15, the advance figure for seasonally adjusted initial claims was 346,000, an increase of 12,000 from the previous week's revised figure of 334,000. The 4-week moving average was 343,000, an increase of 4,250 from the previous week's unrevised average of 338,750.

The advance seasonally adjusted insured unemployment rate was 2.0 percent for the week ending Dec. 8, unchanged from the prior week's unrevised rate of 2.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Dec. 8 was 2,646,000, an increase of 12,000 from the preceding week's revised level of 2,634,000. The 4-week moving average was 2,633,000, an increase of 23,000 from the preceding week's revised average of 2,610,000.

The 4 week moving average of initial claims is at it's highest since October 2005, but it is still far from recessionary levels. However I don't want to sound like one of those economists who won't admit the house is on fire until the blaze is in full swing. Remember employment growth usually does not turn consistently negative until well into a recession and by that time you would have been late to the party. The upward trend over the last couple of months is sending a smoke signal that not all is well in the US labour market.

Initial Jobless Claims Breach 400k in Latest Week

Ex Cyclone Katrina Initial Jobless Claims rose to their highest level since September 2003 punching through the 400k mark. The 4 week moving average shot up to 374,500. From the Department of Commerce:

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT
SEASONALLY ADJUSTED DATA

In the week ending March 29, the advance figure for seasonally adjusted initial claims was 407,000, an increase of 38,000 from the previous week's revised figure of 369,000. The 4-week moving average was 374,500, an increase of 15,750 from the previous week's revised average of 358,750.

The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending March 22, an increase of 0.1 percentage point from the prior week's unrevised rate of 2.1 percent.

The advance number for seasonally adjusted insured unemployment during the week ending March 22 was 2,937,000, an increase of 97,000 from the preceding week's revised level of 2,840,000. The 4-week moving average was 2,859,000, an increase of 32,250 from the preceding week's revised average of 2,826,750.

Lets have a flashback for a moment to a quote from Brian Wesbury that I noted back at the end of January this year.

Brian Westbury on CNBC on, 1/22/2008, “There is really no evidence that the economy has turned over”

“Initial unemployment claims were at 301 thousand in the latest reporting week. This is so far from a recessionary level I’m like, I’m shaking my head at anybody who thinks we’re in a recession.”

How are those unemployment claims looking now Brian? Are you still shaking your head?

Initial Jobless Claims Remain Elevated

Last week's high intial jobless claims number turned out not to be a fluke. Not that anyone who has been paying attention to recent economic data thought it was.

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending Feb. 2, the advance figure for seasonally adjusted initial claims was 356,000, a decrease of 22,000 from the previous week's revised figure of 378,000. The 4-week moving average was 335,000, an increase of 8,500 from the previous week's revised average of 326,500.

The advance seasonally adjusted insured unemployment rate was 2.1 percent for the week ending Jan. 26, an increase of 0.1 percentage point from the prior week's unrevised rate of 2.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Jan. 26 was 2,785,000, an increase of 75,000 from the preceding week's revised level of 2,710,000. The 4-week moving average was 2,727,750, an increase of 24,250 from the preceding week's revised average of 2,703,500.

After a couple of soft weeks in the new year due to seasonal adjustments the 4 week moving average is again on the rise toward that critical 350,000 number. Not that I need it punch through 350k to confirm my recession call. Economic numbers out of the US just keep getting worse.

The debate over whether the US is in, or is going into a recession is not particularly interesting anymore except as a point of amusement when watching the permabulls desperately trying to deny reality.

Now the debate has shifted to how deep the recession will be. Still, the average mainstream economist thinks that the recession will be mild and quick like the previous one and that it is largely already priced into the stockmarket.

That may be so but what if it turns out to be deeper and more severe (as I suspect it will) than most Wall Street lemmings think? The question is then how much of it hasn't been priced in.

Initial Jobless Claims Contained ......for now

Weekly Initial Jobless Claims fell to a 2 month low of 322,000 in the week to January 5th. Investors may breathe a sigh of relief from the latest numbers but for how long? I suspect it will only be a matter of time before the 4 week moving average moves ticks up into the 350,000 - 400,000 danger zone. From the Department of Labor:

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending Jan. 5, the advance figure for seasonally adjusted initial claims was 322,000, a decrease of 15,000 from the previous week's revised figure of 337,000. The 4-week moving average was 341,000, a decrease of 3,000 from the previous week's revised average of 344,000.

The advance seasonally adjusted insured unemployment rate was 2.0 percent for the week ending Dec. 29, a decrease of 0.1 percentage point the prior week's unrevised rate of 2.1 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Dec. 29 was 2,702,000, a decrease of 52,000 from the preceding week's revised level of 2,754,000. The 4-week moving average was 2,701,750, an increase of 17,000 from the preceding week's revised average of 2,684,750.

John Maudlin on Jobless Claims

A few days ago I commented on the drop in US initial jobless claims and suggested that, if we see a few more weeks of low numbers we could be in for an upward revision to payroll numbers on Feb 1st. However as John Mauldin points out in his weekly newsletter initial claims are actually on the rise.

Every week I get an analysis of the claims data from long-time reader John Vogel. Mostly it is not very exciting, but he does a very thorough job of examining the actual data and comparing it to previous years. Stick with me here as I run through a few numbers.

Last week there were actually 521,280 initial claims. That number rose to 547,637 this week. So why didn't the seasonally adjusted number rise? Because in week three of previous years the number dropped, often considerably. In 2007 the number was essentially flat. But in 2006, the drop in the third week was 116,000 and in 2005 it was 226,000. There were also big drops in 2004 and 2003, 187,000 and 172,000 respectively.

So, when you smooth the number out by making seasonal adjustments, you expect a large drop in week three from week two. Except that we did not get that drop, we got a rise of 26,000, which is clearly not the trend for the last five years. That also squares with last week's employment survey which shows job weakness.

The bottom line being;

What it really means is that the BLS numbers should be taken with a huge grain of salt around periods when the economy is changing, as it is now. And using them to make a case that the economy is not weakening, as a number of pundits did, could be considered misleading.

I feel a little silly actually, falling for this rookies mistake of not looking closer at the seasonally adjusted numbers. However it does make me more comfortable with my view that the US labour market continues to deteriorate.

Initial Jobless Claims jumps in latest week.

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT
SEASONALLY ADJUSTED DATA

In the week ending Feb. 23, the advance figure for seasonally adjusted initial claims was 373,000, an increase of 19,000 from the previous week's revised figure of 354,000. The 4-week moving average was 360,500, a decrease of 1,250 from the previous week's revised average of 361,750.

The advance seasonally adjusted insured unemployment rate was 2.1 percent for the week ending Feb. 16, unchanged from the prior week's unrevised rate of 2.1 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Feb. 16 was 2,807,000, an increase of 21,000 from the preceding week's revised level of 2,786,000. The 4-week moving average was 2,777,500, an increase of 24,250 from the preceding week's revised average of 2,753,250.

The 4 week moving average declined slightly by 1,250 however that is largely due to the 2 and half year high number of 378k dropping out of the calculations. As happened last week the previous week was revised upwards, this week by 5k.

Claims remain elevated at the 360k mark. Wall Street lemmings continue to proclaim that jobless claims are not yet at recessionary levels. However by the time they are at recessionary levels, the recession will be well underway and by that time, making the recession call, as Gary Shilling recently said, is about as useful as a pocket in your underpants.

Initial Jobless Claims Inch Higher

The 4-week moving average of initial jobless claims rose to its highest level since February 2004 (excluding the Hurricane Katrina strike)

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending March 15, the advance figure for seasonally adjusted initial claims was 378,000, an increase of 22,000 from the previous week's revised figure of 356,000. The 4-week moving average was 365,250, an increase of 6,000 from the previous week's revised average of 359,250.

The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending March 8, an increase of 0.1 percentage point from the prior week's unrevised rate of 2.1 percent.

The advance number for seasonally adjusted insured unemployment during the week ending March 8 was 2,865,000, an increase of 32,000 from the preceding week's revised level of 2,833,000. The 4-week moving average was 2,832,250, an increase of 19,750 from the preceding week's revised average of 2,812,500.

the 4 week MA has yet to push through that 400k level but it continues to inch ever higher. Expect the upward trend to continue in the coming months.

US Intial Jobless Claims

Initial Jobless Claims are one of the more timely indicators of the health of the labor market and are attracting more attention as they have moved to more elevated levels in recent weeks. From the US Department of Labor:

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending Dec. 22, the advance figure for seasonally adjusted initial claims was 349,000, an increase of 1,000 from the previous week's revised figure of 348,000. The 4-week moving average was 342,500, a decrease of 1,000 from the previous week's revised average of 343,500.

The advance seasonally adjusted insured unemployment rate was 2.0 percent for the week ending Dec. 15, unchanged from the prior week's unrevised rate of 2.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Dec. 15 was 2,713,000, an increase of 75,000 from the preceding week's revised level of 2,638,000. The 4-week moving average was 2,644,500, an increase of 13,500 from the preceding week's revised average of 2,631,000.

The the 4 week moving average dropped by 1,000 however that was because the 353,000 initial claims number for the week to November 24th fell out of the calculations. As noted previously claims are far from recessionary levels however it is only a matter of time before they start to set off alarm bells.