Today’s news from the Department of Labor on initial weekly unemployment claims was supposedly good — as long as one doesn’t scratch beneath the surface. Journalists used to do that. Today they didn’t.
All one had to do is reach the third paragraph of DOL’s release to realize that today’s seasonally adjusted claims number of 343,000, touted as the lowest in two months in several news reports, was suspect. That paragraph told us that the 428,814 actual claims filed during the week ended December 8 were barely lower than the 435,863 claims seen in the week ended December 10, 2011, last year’s comparable week; today’s result only occurred because this year’s seasonal adjustment factor was significantly different from last year’s. I believe that this year-over-year drop of less than 2% in raw claims is the smallest weekly difference in a week not affect by storms or holidays this year. In other words, it really is news — but not in the business press, which runs with the government’s seasonally adjusted data and almost never looks any further. Examples follow the jump.
Here’s Christopher Rugaber at the Associated Press:
WEEKLY US JOBLESS AID APPLICATIONS DROP TO 343K
The number of Americans seeking unemployment benefits fell sharply for a fourth straight week, a sign that the job market may be improving.
The Labor Department said Thursday that weekly applications for unemployment benefits fell 29,000 last week to a seasonally adjusted 343,000, the lowest in two months. It is the second-lowest total this year.
As shown above, today’s tiny year-over-year dip in raw claims make a mockery of Rugaber’s assessment. Year-over-year differences in five-day business weeks unaffected by storms have been running at about 7%-10% for most of the past year or so. So how can a difference of less than 2%, which will likely end up being below 1% after next week’s virtually inevitable upward revision, be “a sign that the job market may be improving”? Answer: It can’t.