I look at an analysis of individual state claims as a kind of advance decline line for confirmation of the trend in the total numbers. The states report the data to the Department of Labor, which accumulates the data into its weekly national report. It’s also interesting to see how the big oil states are doing.
The impact of the oil price collapse started to show up in state claims data in the November-January period. While most states show the level of initial claims well below the levels of a year ago, in the oil producing states of Texas, North Dakota, Louisiana, and Oklahoma, since the beginning of 2015 claims have been consistently above year ago levels. North Dakota and Louisiana claims first increased above the year ago level in November of last year. Texas reversed in late January. Oklahoma joined the wake shortly after that. Here are the current year to year comparisons.
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Claims increased year to year in North Dakota, Oklahoma, and Texas. Louisiana has had small drops in recent weeks. That state had consistently shown higher year to year claims until mid July. The numbers have varied widely week to week but the trend of claims being significantly higher than the same week last year has been persistent with the recent exception of Louisiana. Texas, with a huge and more diversified economy improved in the second quarter as the price of oil rebounded and stabilized, but that improvement was temporary and new claims in Texas have been climbing since the end of June.
In the August 8 week, 13 states had more claims than in the same week of 2014. That was up from 12 in the prior week. This number fluctuates widely week to week with many states near even. At the end of the third quarter of 2014 just 5 states showed an increase in claims year to year. At the end of 2014 that had increased to 8. In early April this year the number had risen to 22.
The 22 states that were higher in early April gives us a benchmark to watch, similar to an advance decline line in the stock market. If the number of states showing a year to year increase in claims should exceed 22, it would be an indication that the national trend of decreasing claims has probably reversed.
I track the daily real time Federal Withholding Tax data in the Wall Street Examiner Pro Trader- Federal Revenues report. The year to year growth rate in withholding taxes in real time is now running +2.5% in nominal terms. That’s equivalent to around 0.5% to 1% adjusted for wage inflation.
Withholding tax collections tend to rise and fall in a cycle lasting three to four months. The growth rate had dropped sharply in July after being remarkably consistent around +5-6% in the second quarter. It has begun to recover in the first 11 days of August.
The next Pro Trader Federal Revenues report will be posted later today.