As has been so typical in analogous instances for the year or so I have been following the weekly claims numbers closely, the Associated Press (aka the Administration's Press), Reuters, and Bloomberg headlined a "dip," a "fall," and a "drop" in filings for initial claims, even though the dip-fall-drop from 368,000 to 367,000 only occurred because last week's figure was revised up from 365,000. If this week's figure is revised up by 1,000 or more (based on the past 60 weeks, there's at least a 95% chance of that), the dip-fall-drop will be gone-gone-gone. The AP's Paul Wiseman produced the howler of the morning in the last of the five excerpted paragraphs which follow (bolds are mine):
The number of people applying for U.S. unemployment benefits ticked down last week after dropping sharply the previous week, evidence hiring could pick up this month.
Weekly applications dropped 1,000 to a seasonally adjusted 367,000 in the week ending May 5, the Labor Department said Thursday. The previous week's figure was revised up slightly.
The four-week average, a less volatile measure, fell by 5,250 to 379,000. It was the first decline since late March.
Applications are a measure of the pace of layoffs. When they stay consistently below 375,000, it suggests job growth is strong enough to lower the unemployment rate.
Applications are falling again after rising for most of April. The spike in applications coincided with weaker hiring this spring. Employers added an average of 135,000 jobs per month in March and April. That raised fears that the job market is sputtering after a strong winter.
Here's a chart for Paul Wiseman and his AP colleague Christopher Rugaber, who is the most frequent utterer of the "below 375,000" meme, to digest:
As seen in the chart, seasonally adjusted unemployment claims were below the "just fine" threshold during all of March. Yet the number of seasonally adjusted jobs added dropped to 154,000 from 259,000 in February. The below 375,000 meme says that shouldn't have happened. But it did
Rugaber and Wiseman will surely object and say that their meme applies to the unemployment rate, but I'm not the one (Wiseman is) who falsely claimed that the decline in job growth "coincided" with a spike in claims which didn't begin until April. And as to the drop in the unemployment rate, even AP's writers had to concede that last month's drop took place only because so many Americans gave up looking for work. Extending their "logic," if claims get below 350,000, it will mean that even more people are staying home, and the unemployment rate will drop further. Oh boy.
What all of this really shows is that the unexplained rise in benchmark for unemployment claims being a precursor of genuine economic improvement from 325,000 less than three years ago to 375,000 now has no basis in reality.
Cross-posted at BizzyBlog.com.