Press Celebrates Unemployment Claims Drop Below 400K, Ignores Track Record of Upward Revisions
Two "alert" emails hit my inbox this morning concerning the Department of Labor's just-released unemployment claims report.
The one I expected came from CNNMoney.com, which read: "Initial unemployment claims fall below 400,000 for the first time in more than 3 months, dropping 24,000 to 398,000 in latest week." The other one came from USAToday.com, which does not ordinarily issue alerts when this report appears, took the opportunity to relay the same message, followed by an assertion that today's report is "a sign the job market may be healing after a recent slump."
Over at the Associated Press, Christopher Rugaber joined in the premature e-celebration (possibly more permanent link here):
The number of people seeking unemployment benefits dropped last week to the lowest level since early April, a sign the job market may be healing after a recent slump.
The Labor Department said Thursday that weekly applications fell 24,000 to a seasonally adjusted 398,000. That's the first time applications have fallen below 400,000 in 16 weeks.
The four-week average, a less volatile measure, dropped to 413,750, the lowest since the week of April 23.
Stocks rose after the report was released.
Economists cautioned that the lower level only reflects one week of data and that doesn't necessarily signal a trend.
The two emails, Rugaber's dispatch, and Annalyn Censky's CNNMoney's report (USAT carried Rugaber's work) all engaged in premature e-celebration because they failed to inform readers about the report's history of subsequent-week revisions. In 18 of the past 20 weeks, upward revisions have been 2,000 or more. An increase of that magnitude or greater would of course restore the supposedly broken streak if it takes place next week. The average upward revision for the past 20 weeks from initial announcement to final result has been 4,500:
The folks at Zero Hedge, who have been looking at this trend much longer than yours truly and observing similar results, today found it all "quite amusing as next week's upward revision will mean the 400k+ streak will continue."
Well, not for certain. But just as it would be irresponsible for a sports announcer to report a halftime score as a final, it's just as irresponsible to claim that a streak has ended without identifying its clearly tentative nature -- especially given what's happened during the rest of the game for the past several months.
Cross-posted at BizzyBlog.com.
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Comments
What??
Submitted by Samaritan01 on Thu, 07/28/2011 - 4:24pm.
The MSM is ecstatic over the unemployment picture being less horrible than usual. This is a record of new unemployment claims and therefore has little connection to the ultimate level of unemployment.
Obama has been playing with the actual unemployment figures which is probably well into the double-digits. We need to increase the ranks of the unemployed by at least one more person......
Media will highlight anything positive
Submitted by Rover on Thu, 07/28/2011 - 4:43pm.
Tom,
Not sure you're entirely fair here - yes, this will probably be revised up, but just comparing this datum to the other initial-release numbers, it still shows a considerable improvement over all numbers going back to the beginning of April. That the final number is above or below 400K is rather arbitrary. I think it's fair to say that this report signals an improvement, but also fair to point out that any single week must be taken with a grain of salt.
Samaritan01 has a good point, in that the media is going to be reporting this BREATHELESSLY as signs that everything is turning around. Everything that can POSSIBLY be painted as positive will be, everything that is negative will be downplayed, ignored or even censored. And the liklihood that this number will tip over 400K once revised will not be pointed out, and if/when it happens will not be reported on.
Rover
Under Bush 300,000 was the magic number.
Submitted by Lipton on Thu, 07/28/2011 - 4:32pm.
Less than that meant the job market was improving more than that signaled it was declining.
Must have missed the point*
Submitted by cajun2 on Thu, 07/28/2011 - 5:00pm.
Sorry Tom, it seems I have missed the whole point of this story. Whether the numbers are up or down means little to me.
Looking at the overall numbers from your chart, there is an average of 425K to 398K newly unemployed every week. If you do not consider the effects to those people's lives, economy, and housing then I could see someone spinning this as a positive. But just think of the misery and stress in the lives of another 4 million people in the last 6 months.
Your stress/misery number is probably a good one ...
Submitted by Tom Blumer on Thu, 07/28/2011 - 5:37pm.
Even though 400K x 6 months would be about 10 million, lots of the claims are very short-term between as good as or better jobs, some of them are what I would call nuisance claims (i.e., you file for unemployment during a scheduled multi-week shutdown, spring break, etc.), and others are abusing the system (just quitting and filing knowing their former employers don't have the time and resources to fight it).
And Tom*
Submitted by cajun2 on Thu, 07/28/2011 - 7:17pm.
Let's not forget, these numbers are based on "unemployment" applicants. There are millions of people who are un-employed and no longer eligible for benefits or they do not qualify due to repeated short term jobs. I am in that category. Those are not counted in the poll. Many of them in my family due to the cuts in oil and gas production industry are no longer eligible for benefits and are still unemployed due to the "court erased" moratorium. There are people that take advantage of unemployment benefits by quitting jobs after 6 months then filing for their "unearned income tax credits" which will expire, finally.
This poll alone does not explain the problems in the job market. Not just the oil and gas industry, but other industries as well are taking their jobs to other countries already preparing for the rules, regulations, and taxes that are coming.
This poll should always be discussed along with the current food stamp rolls as well. Those figures are rising continuously since 2008. Four years ago, it was 26 million, last time I looked, it was 44 million. The true numbers of unemployed or under- employed are in that group.
Maybe next week's revision
Submitted by bkeyser on Thu, 07/28/2011 - 4:55pm.
will show the number was actually 390. I mean, with doomsday approaching, and touted specifically by the President and his allies for the last two weeks, it makes sense that businesses would pick up hiring, right? Then again, maybe the Census Bureau falls under the jurisdiction of the Federal Government and a number below the recent media-spun, good news bar would be more helpful than the actual number of 404 or so that it will be in the final report.
Perspective
Submitted by Joe W. on Thu, 07/28/2011 - 5:06pm.
Big deal...24,000 less unemployed?? That's less than 500 per state. And the MSM is all hyped up over this??? Bwahahahahahahahahaha........
Obviously, employers are running out of people to fire
Submitted by Dave. on Thu, 07/28/2011 - 7:02pm.
And that will last right up until the higher taxes and fees with Obamacare, along with the other taxes on the way kick in, and then they will find some more employees to get rid of.
A lot more.
-Dave
Vote for the American in November
Party time...
Submitted by Spoker on Thu, 07/28/2011 - 7:38pm.
I think I'll join the LSM and go out and party tonight. After all, only 400,000 families lost a wage earner this week and are going to worry about just a few things like where that are going to live, what they are going to eat, how do they put gas in the car so they can look for a job, sending kids to college, ....... No, on second thought a party doesn't seem like such a good idea.
The Press? What press?
Submitted by jessieH on Thu, 07/28/2011 - 8:46pm.
The Press? What press?
The Press?
Submitted by Chris Norman on Fri, 07/29/2011 - 2:53am.
The press? You know, "the press" found in the MSM Laundry, that washes, spins, and presses the news making it all nice and clean for Obama and the Democrats.
Time to celebrate
Submitted by CobraMan on Fri, 07/29/2011 - 11:12am.
Time to celebrate! As the unemployment numbers "drop" to just under 4.8 million newly unemployed people this last four months, the GDP "grew" at a "tepid" anual rate of 1.3 percent in the last 3 months, and the stock market has barley been able to maintain itself at just over 12,000, and the AP has declared that the recession ended two years ago!
The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States. The US Constitution
Unless you're a fetus. The US Supreme Court
Or Anwar al-Awlaki.
Here's some other revisions, Tom
Submitted by CobraMan on Fri, 07/29/2011 - 11:10am.
Here's some other revisions, Tom:
Stocks dropped in morning trading. The Dow Jones industrial average fell 100 points, and broader indexes also declined. (Just ONE DAY after the AP reported that "Stocks rose after the report was released.")
The government revised the January-March figures to show just 0.4 percent growth — down sharply from its previous estimate of 1.9 percent.
The sharp slowdown means the economy will likely grow this year at a weaker pace than last year. Economists don't expect growth to pick up enough in the second half of the year to lower the unemployment rate, which rose to 9.2 percent last month. (The AP reported just a few weeks ago that estimate to be 8.9 percent)
Earlier this year, economists thought that a Social Security payroll tax cut would accelerate growth in 2011. But most of that money has gone to pay for higher gas prices.
The government also revised data going back to 2003. The data show the recession was even worse than previously thought. The economy shrank 5.1 percent during the recession, which lasted from December 2007 through June 2009, compared to the earlier estimate of 4.1 percent.
The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States. The US Constitution
Unless you're a fetus. The US Supreme Court
Or Anwar al-Awlaki.
"5 million green collar
Submitted by shirtsbyeric on Fri, 07/29/2011 - 1:11pm.
"5 million green collar jobs!"