On Jobless Claims Report, AP's Crutsinger Discounts the Present, and Gets the Past Wrong
- Just before Christmas, he appeared to be lowballing the consensus estimate of 4th Quarter 2005 GDP growth by describing it as "around 3 percent," when a broad-based Bloomberg survey of economists indicated a consensus forecast of 3.3%.
- Second, he pooh-poohed November's Construction Spending report released two days ago by giving full credit for the increase to a record level to Government Sector spending, which offset decline in "home building." The reality was that Nonresidential spending in the Private Sector deserved the largest portion of the credit, and that the residential spending decline, which occurred in the Government Sector, was most likely related to apartments, assisted-living quarters and other non-owned properties.
- Today, he sought to discount the good news about initial job claims, and hearkened back to the previous economic expansion with an incorrect reference.
Jobless Claims Plunge to Five-Year Low
The number of newly laid-off workers filing claims for unemployment benefits fell to the lowest level in more than five years last week, but economists cautioned that the decline is probably overstating the improvements in the labor market.
The Labor Department reported Thursday that applications for unemployment benefits dropped by 35,000 to 291,000, the smallest number since Sept. 23, 2000, when the economy was in the concluding months of the longest economic expansion in history.
..... However, economists noted that last week's improvement is probably exaggerating the labor market rebound because it is hard to get a clear reading of layoffs in the week between Christmas and New Year's.
Crutsinger makes to references to pooh-poohing "economists," but only quotes one who seemed to support his first cold-water splash (Stephen Stanley, chief economist at RBS Greenwich Capital). The second economist quoted (Ian Shephardson, chief economist at High Frequency Economics) made a technical comment about expected upcoming improvements that did not discount the validity or significance of today's report.
What about the italicized words in the excerpt? Oh, that's Crutsinger's "those were the days" bit about the last time unemployment claims were so low. He uses a clever reference to the economic expansion of the 1990s to get in a plug for the previous administration.
Cute. Too bad it's wrong.
September 23, 2000, was towards the end of that year's third quarter. Third quarter 2000 GDP growth, per the government's Bureau of Economic Analysis, which publishes and maintains the GDP reports, was minus 0.5%. To see this figure, go to this link at the BEA, select a start date of "2000-A&Q" or earlier, and hit the "Refresh Table" button.
The expansion concluded in the 2nd quarter of 2000, not the 3rd. Sorry, Martin.
Cross-posted at BizzyBlog.com.