Below is the blaring MSM headline about the plunge in unemployment claims this morning. The talking heads on CNBC and the rest of the worthless journalists paid by the MSM dutifully reported that this confirms last week’s fake unemployment report. One little problemo. The Dept of Labor mentioned that one large state did not report their data. Only California is big enough. This isn’t a little statistical anomaly. It’s a fucking mistake. California, with 2 million people unemployed out of the 12 million in the whole country, accounts for 17% of all the claims in the country. If they don’t report their data properly, the whole press release is a sham. Isn’t it convenient that this little anomaly happens three weeks before the election. Must be another one of those coincidences.
Jobless claims plunge to four-year low
Claims fall 30,000 to 339,000, well below expectations
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — The number of U.S. workers who filed new applications for unemployment benefits dropped sharply, by 30,000, last week to 339,000, the lowest level in more than four years, the Labor Department reported Thursday in what may have been the result of a statistical fluke.
Economists polled by MarketWatch had expected initial claims in the week of Oct. 6 to rise 1,000 to a seasonally adjusted 368,000. Last week’s number was revised up by 2,000 to 369,000.
The four-week average of new claims, meanwhile, dropped 11,500 to 364,000, the lowest level since late March. The moving average is considered a more accurate barometer of employment trends because it smooths out quirks in the weekly data.
Today’s data seemingly fit with the improvement in the labor market seen in the latest monthly jobs report, issued last Friday. The U.S. added 114,000 net jobs in September and the unemployment rate fell below 8% for the first time since President Barack Obama took office. Read more on payrolls report.
“Maybe the unemployment rate drop wasn’t a fluke?” said Robert Brusca, chief economist at FAO Economics.
A Department of Labor analyst said that a single large state was responsible for most of the drop in claims.
“This suggests that the plunge in seasonally adjusted claims likely overstates some recent labor market progress, though we continue to note that trends in claims are looking more positive,” said Gennadiy Goldberg, an interest rate strategist at TD Securities.
Added Stephen Stanley of Pierpont Securities: “The formula for the size of a claimant’s benefit check is derived based on an average of their last few quarters of pay (the more you were earning before being laid off, the bigger your unemployment check would be). Thus, in many cases, it pays for a laid-off worker to game the formula by waiting until the beginning of the next calendar quarter to file (if they can wait that long), as they may have been getting paid more in the quarter when they were laid off than in the quarter that rolls out of the equation if they wait.”
“As a result, there is an accumulation of claims that are likely submitted over a period of several weeks but not processed until the turn of the quarter. Apparently, the state in question (and it pretty much has to be California to account for anything close to 30,000) forgot to include that stockpile of unprocessed claims in their tally for this week (which is the first week of a new calendar quarter). Since the seasonal factors expected an unadjusted surge of almost 20% in the period to account for the quarterly filing pattern, failure to adhere to that pattern in the raw data (unadjusted claims were only up 8.6%) creates a big drop seasonally adjusted.”
U.S. stocks (SNC:SPX) were stronger Thursday after the report. Read Market Snapshot.
In the week of Sept. 29, the number of people who continued to receive benefits under state unemployment programs declined 15,000 to a seasonally adjusted 3.27 million. The four-week average of continuing claims fell by 7,750 to 3.28 million.
About 5 million people received some kind of state or federal benefit in the week ended Sept. 22, down 43,970 from the prior week. Total claims are reported with a two-week lag. There were 6.8 million people receiving benefits in the same week in 2011.
In a separate report, the government said that the trade gap widened in August to $44.2 billion as exports declined for the third straight month.