At AP, Fewer Unemployment Claims 'Suggests' That 'Employers Kept Hiring'
You're going to have a hard time convincing me that Associated Press CEO Dean Singleton's lavish praise of President Barack Obama noted earlier this week by Matt Sheffield at NewsBusters hasn't trickled down to the beat reporters and affected their day-to-day coverage.
Take this opening sentence from the AP's Christopher Rugaber written shortly after the Department of Labor released its weekly unemployment claims report: "The number of people seeking U.S. unemployment benefits fell to a four-year low last week, suggesting employers kept hiring in March at a healthy pace." Really, Chris? Exactly how does less firing translate to more hiring? It doesn't (historical correlation, to the extent that it's there, doesn't signify causation). There are any number of firms which are not letting people go but which are also not hiring. Several other paragraphs from Rugaber's report follow:
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Weekly applications dropped 6,000 to a seasonally adjusted 357,000, the Labor Department said Thursday. That's the fewest since April 2008.
The four-week average, a less volatile measure, fell to 361,750, also the lowest in four years. The average has dropped nearly 13 percent in the past six months.
When unemployment benefit applications drop consistently below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.
The downward trend in applications is a promising sign ahead of Friday's report on March job growth.
... "We believe that the economy has entered a more self-sustaining phase of the recovery with stronger job creation," said John Ryding, an analyst at RDQ Economics, in a note to clients.
Last week's "lowest in four years" number was adjusted upward to 363,000, which moved it into a tie for the lowest in four years; of course, Chris didn't tell us that. This week's number, after next week's virtually certain upward revision, will probably be still be lower than 363,000, and will remain as a legitimate four-year low.
As to Rugaber's "suggested" tie-in of firings to hirings:
- During the five weeks ended February 2, 2008, weekly claims averaged a seasonally adjusted 341,000, about 6% or so lower than the results of the past several weeks. In January 2008, seasonally adjusted employment increased by a puny 41,000. Following Rugaber's "logic," the jobs increase should have been in the hundreds of thousands.
- A response to the previous might be, "Well, the unemployment rate was much lower." That's exactly right. With unemployment at 8.3% currently, which is predicted not to change tomorrow, and the economy picking up a bit (though still very unimpressively by historical standards), many employers are lifting their hiring freezes. That has nothing directly to do with how many other employers are letting workers go.
Oh, and claims have been below Rugaber's 375,000-claim benchmark for lowering the unemployment rate for each of the past six weeks, and seven of the past eight. Yet the unemployment rate is predicted to stay the same. It looks we have another "suggestion" which might be going awry. If the expected tracking doesn't materialize, Chris may need Dean Singleton's permission to remove the boilerplate.
Cross-posted at BizzyBlog.com.