Bloomberg, AP Mimic DOL Meme on Ugly Unemployment Claims Report: 'Holiday Distortions'
Bringing on yet another appearance of the dreaded "U-word" — "unexpectedly" (via Bloomberg) — the Labor Department reported today that initial claims for unemployment benefits rose to a seasonally adjusted 379,000. That's a nine-month high, and an increase from last week's also unexpected 369,000. This week's and last week's results were far above the 332,000 and 320,000, respectively, analysts had predicted.
The Department of Labor's excuse for the past two dismal weeks has been "holiday volatility." Though they mostly had a point last week, this week they don't. Last week was the week after Thanksgiving, while that holiday took place six days earlier in 2012. But the week ended December 14, 2013 and the comparable week from last year (12/15/12) are both sufficiently removed from Thanksgiving's influence on the numbers that the holiday has no meaningful impact. The business press is pretending that DOL is right.
Convincingly bucking the long-term trend of falling year-over-year claims, this year's raw (i.e., not seasonally adjusted) claims were 3.1% higher than last year's comparable week. That didn't stop Chris Rugaber from the Associated Press, aka the Administration's Press, from tentatively going with the DOL line (bolds are mine throughout this post):
WEEKLY US JOBLESS CLAIMS HIT 9-MONTH HIGH OF 379K
The number of people seeking U.S. unemployment benefits rose 10,000 last week to a seasonally adjusted 379,000, the highest since March. The increase may reflect volatility around the Thanksgiving holidays.
Applications are a proxy for layoffs. Last month, they fell to nearly the lowest level in six years, as companies cut fewer jobs. But two weeks ago, they surged 64,000 to 369,000.
Economists dismissed that spike, saying it likely reflected a Thanksgiving holiday that fell later in the month. That can distort the government's seasonal adjustments. But if the trend continues it would be a troubling sign of rising layoffs.
"That spike" was last week (the week of 12/8/12). But seasonally adjusted claims went above that spiked level during the most recent week. Rugaber didn't try to explain why things got worse this week.
Bloomberg's Michelle Jamrisko wasn't tentative in her reaction. She ran with the DOL line without skepticism:
U.S. Jobless Claims Unexpectedly Rise on Holiday Distortions
Applications for U.S. unemployment benefits unexpectedly rose last week to an almost nine-month high, showing fluctuation in the filings that typically occurs around the year-end holidays.
One could argue that at least the retail sector would be less inclined to lay people off during the first half of December because of the compressed Christmas shopping season. But AP and especially Bloomberg were too busy swallowing DOL's excuses to even consider that point.
The big question in my mind is whether employers are laying off more employees because business isn't that good, because the impact of Obamacare is finally hitting home, or a combination of both.
Cross-posted at BizzyBlog.com.