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Home Publications Blogs Beat the Press Preemptive Strike: Don't Panic About Unemployment Claims

Preemptive Strike: Don't Panic About Unemployment Claims

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Thursday, 12 April 2012 08:00

As I've complained in the past, the media frequently make too much of a single week's data on unemployment claims. There will likely be some tendency to hype the fact that last week's claims were reported today as 380,000 [corrected --thanks David G.], well above the consensus expectation of 355,000.

Before the exaggerations were on the positive side, today they are likely to be on the pessimistic side. Remember folks, it is just one week's worth of data. The numbers are erratic and are subject to revision (almost always upward).

There is probably some reality to this rise for reasons I have written on in the past. The unusually good weather in the Northeast and Midwest meant that there was likely more employment in construction, restaurants, retail and other sectors in these months than would typically be the case. This means that there will be less hiring in spring than usual.

This shows up in the UI data because people who lose their jobs will have a more difficult time getting new jobs in April than would ordinarily be the case because the seasonal openings are not there. This is not a disaster -- the economy is not in danger of sliding into a recession -- it just means that job growth will likely be somewhat slower in the months ahead than it was in the winter months.

One more point. The number of claims reported for two weeks ago was revised up from 357,000 to 367,000. This means that it was not the lowest number of claims reported for four years.

Comments (3)Add Comment
Typo?
written by David G, April 12, 2012 9:25
Looks like 380K not 480K
The Job Market Still Sucks, Big Time
written by Paul, April 12, 2012 12:51
This is not going to end soon because consumption (70% of demand) is still severely depressed from its historic trend line. Absolutely nothing is being done by the government to increase consumption, so we are stuck with high unemployment for years.

But it could be worse: Obama and the Republicans could have agreed last summer on a "Grand Bargain" to cut the deficit which would have depressed the economy even more.
Just How Bad Is This Week’s Unemployment Claims Data? Not Bad At All
written by Lee Adler, April 12, 2012 4:08
The advance number for actual claims is down by 66,154 or 14.7% since last year. The total number of claims will be revised up next week, so that in the end the difference will be closer to 60,000 or something on the order of 14%. There are many reasons for the drop and you can find negative arguments, such as that fewer workers are eligible to file claims (not true), but the fact is that far fewer people are losing jobs this year. New claims this week as were 0.29% (29 hundredths of a percent) of current total nonfarm payrolls. In the same week last year they were 0.34% (34 hundredths of a percent). So the decline in claims is not a matter of fewer people being eligible. A smaller percentage of the eligible are filing claims. Fewer people are losing jobs.

http://wallstreetexaminer.com/...ad-at-all/

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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