AP: Unemployment Claims Dip to Pre-Revised 395K Is 'Good News,' Alone Moved Markets
If we're to believe Associated Press reporter Daniel Wagner, this morning's report from the Department of Labor on unemployment claims revealing that initial claims during the week ended August 6 fell to 395,000, was "good news." Why, according to Wagner, that drop, all by itself, it was "enough to catapult stocks," pushing the Dow up by 423 points in Thursday's trading.
Uh, not exactly, Daniel. First, though the decline in initial claims was in the right direction, it was only 5,000, or 1.25%, less than last week's original number of 400,000 (naturally revised up to 402,000 this week), and an even tinier 3,000 fewer than the initial number two weeks ago. If (more like when, given the track record of previous weeks) it's revised up by 3,000 or so, it will be even less impressive. Huge advances in the Dow do not arise from such tiny improvements.
At The Street.com, Chao Deng had a more measured take on today's market results, but his attempted explanation didn't make a lot of sense either:
Stocks soared Thursday, extending this week's dizzying up-and-down action, as the Dow Jones Industrial Average retraced much of its recent decline with help from modest improvement in employment data and a strong quarterly report from Cisco.
Though AP's Wagner didn't identify Cisco in his report, that's actually okay, because the markets had plenty of time to digest Cisco's strong earnings result as well as the unemployment claims report before the opening bells rang. At 8:45 a.m., 15 minutes after the unemployment claims report's release, Dow futures were down 48.
CNBC's Bob Pisani identified three items influencing the markets' good day which at least had some potential to make sense:
The stock market moved because there are some data points surfacing that things might be changing.
1) announcement of a Sarkozy-Merkel meeting next week reversed the downward trend prior to the open. The perception: they're going to address the possibility of an EFSF bailout of every country.
"If Merkel comes out to support the EFSF, or a eurobond, then that's all you need," one trader told me. "She likely has enough to jam it thru Parliament."
2) Rumors of European short selling ban surfaced, particularly in Italy. Hopefully this will turn out not to be true.
3) Insider buying, corporate buybacks jump. This was widely discussed on trading desks today. How do you know when you're at a bottom? It's hard to tell, but when insiders and corporations show signs of buying, that's at least a good starting point.
Sorry, Daniel Wagner, I'm not buying what you're selling on today's marginal improvement in DOL's unemployment claims report moving today's markets -- nor should any of your wire service's readers, listeners, or viewers. Unfortunately, many will, because they don't follow the news that closely, and subscribing outlets will mostly not have the time to determine that the info you provided is pap and not fact.
This shows once again how poorly we are served by the self-described Essential Global News Network.
Cross-posted at BizzyBlog.com.
- Tom Blumer's blog
- Login to post comments
Comments
It's a joke
Submitted by forest on Thu, 08/11/2011 - 11:08pm.
The revised numbers game is getting old. Report 'improvement' every week , quietly revise it away, and report fake numbers again. Repeat.
It's funny
Submitted by cheesegrater on Fri, 08/12/2011 - 6:01am.
During the George W. Bush era, the Dow would advance whenever unemployment increased, due it was said, to greater corporate profitability; which to me makes sense, although it was used as a club to bash him. The meme being, "Look, the evil corporate friends of Bush are profiting on misery". Now the exact opposite occurs for the benefit of Barack Obama poll numbers and we're led to believe that the market's are not manipulated.
I heard the AP Radio News
Submitted by bkeyser on Fri, 08/12/2011 - 8:39am.
at noon yesterday on Sirius Patriot, between Beck and Wilkow. The woman comes on and says something to the effect that the unemployment numbers were much improved with a drop in the number of first-time filers. Then she said how the markets obviously approved of the fortunate turn in the labor market, and that at that moment, the Dow was up around 275 or so. They played a soundbite of some broker lauding the good news and right direction the country is headed in.
Not once during the report did she say what the number of first-time filers was (395k) or that last week's number had be revised upward (to 402k). She also never put in context the real drop from last week (1.75%- otherwise known as "statistical noise"). I hadn't heard the actual number to that point and would have wore, by the report, that it would have been in the "good news" 300k or below range. Completely dishonest reporting by the AP.
Ah, Tom
Submitted by Blonde on Fri, 08/12/2011 - 9:14am.
Uh, not exactly, Daniel. First, though the decline in initial claims was in the right direction, it was only 5,000, or 1.25%
I made the exact same point, yesterday afternoon, after hearing these numbers. Yet the media gloms on to the most innocuous "less bad" news as WONDERFUL, while the thundering silence of bad economic news is just that...thundering silence.
I think people have become numbed to the lies...and also to the perpetual "restatements"....we get weekly, monthly, and quarterly restatements from this government. Gosh, Q1 growth is down to what? An anemic .5%? Again, thundering silence from demedia.
Handy Reference Guide to Obama's Gaffes and Goofs ~ Currently Numbering 200 (and Counting)
Revisionist history
Submitted by Tomorama on Fri, 08/12/2011 - 10:00am.
One can easily dig up these same asshats hammering and belittling the Boooooooosh economy when it was CREATING 350,00 to 400,000 jobs a month as they WOULD ALWAYS include in their "hit pieces" that 250,000 to 300,000 jobs are needed to "break even" so in reality we are only........... plus 50,000 or 100,000 as if that were SH**......
Anyone else wish for those bad times?
the AP, is Always Pathetic..
Claims Dip
Submitted by truebluedetroiter on Fri, 08/12/2011 - 11:01am.
Yes, in 4 weeks they will say they were wrong and the number really is 405,000.
In 2 weeks or so. School
Submitted by Zippy on Fri, 08/12/2011 - 3:05pm.
In 2 weeks or so. School starts. There will be even more people off the rolls.
Watch Barry try to claim credit.