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The Department of Labor reported Thursday that for the week ending Oct. 13, seasonally adjusted first-time claims for unemployment benefits rose to 388,000, an increase of 46,000 from the previous week's revised figure of 342,000. The less volatile four-week moving average rose marginally to 365,500. In the comparable week of 2011, first-time claims were 402,000.

What seems like an outsized rise in claims this week is most likely just a correction of the outsized drop of 30,000 claims reported last week. A Labor spokesman said then that the drop was at least partly the impact of one large state not filing a report. That state was California. But the comment from the department didn't make the real situation clear. Here's what actually happened.

The state did report weekly jobless claims but did not process and report its quarterly claims number (when many people have to reapply for benefits for technical reasons as opposed to being newly laid off). As a result, there wasn't the expected spike in claims that normally happens at the start of the quarter.

It is unclear why that happened or how unusual that is. What is clear is that the expected spike in claims around the start of each quarter was smaller this time than usual. Coupled with the seasonal adjustment (that expected a bigger increase), that pushed down the headline figure.

In other words, the drop of 30,000 last week had more to do with the lack of expected re-filings at the start of the fourth quarter than with any particular improvement in labor market conditions.

In other words, last week's claims and this week's claims are added noise in what is already a fairly noisy report. No big plunge in first-time claims last week, and no big spike this week. One more reason the running four-week average is preferred by most economists.

Thus, next week's claims numbers are likely to fall within the same 360,000-380,000 range they generally have been in for the past six months.

For the week ending Sept. 29, the department reported that the total number of people collecting unemployment benefits in all programs, state and federal, was 5,001,985, down 42,664 from the previous week. For the comparable week of 2011, the number was 6,694,493. The drop reflects both people who got new jobs and those who exhausted their benefits without finding work.

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Comment Preferences

  •  Tip Jar (18+ / 0-)

    Don't tell me what you believe, show me what you do and I will tell you what you believe.

    by Meteor Blades on Thu Oct 18, 2012 at 08:30:05 AM PDT

  •  If you average out the two weeks... (1+ / 0-)
    Recommended by:
    Supavash

    You get a claims number of 365,000, which is inline with estimates.  

    Why is Mitt Rmoney so happy that an American embassy was attacked? Why does he hate America?

    by RichM on Thu Oct 18, 2012 at 08:33:25 AM PDT

  •  This AM, thinking about how Repubs would play this (2+ / 0-)
    Recommended by:
    Supavash, Meteor Blades

    I recalled all the times when numbers spiked up and we were reminded to look a the 4-week averages.  However, I"m betting they won't let this shiny object pass (this week's claims).  They'll see the warning to not read too much into this week's data as a liberal media conspiracy, as opposed to connection with Reality.  Not saying we don't have some of those reality-check issues on our side, but their tendency towards imaginary thinking is very nearly a clinical pathology.

    I hate hate. I love the look in peoples eyes when they realize, for the first time, that they have power.

    by 4democracy on Thu Oct 18, 2012 at 08:37:22 AM PDT

  •  reading weekly jobs figures is like reading (1+ / 0-)
    Recommended by:
    Supavash

    weekly polls, they are best characterized as meaningless.

    Look, while Romney is ruinous, Obama has nothing about the fundamentals of the economy.  There will be no major changes in employment rates until there is a fundamental change in policies supporting it.

    "To recognize error, to cut losses, to alter course, is the most repugnant option in government." Historian Barbara Tuchman

    by Publius2008 on Thu Oct 18, 2012 at 08:38:13 AM PDT

  •  Take a look at Gallup's unemployment numbers (1+ / 0-)
    Recommended by:
    Supavash

    The upward movement in the BLS index is entirely a product of their seasonal correction process, which by the way is antiquated, counterproductive and needs to be junked.  For naked numbers, see here:

    http://www.gallup.com/...

    •  You can see "naked numbers" — that is... (3+ / 0-)
      Recommended by:
      greenbird, MKinTN, joe shikspack

      ...not seasonally adjusted numbers — in the BLS report, too.

      Calling BLS's seasonally adjusted adjustment "antiquated" given that it is modified constantly based on new data is a stretch. It isn't perfect, but the idea of junking it ought to be accompanied with a proposal for what replaces it.

      If you look at a couple of years' worth of Gallup numbers, you will be less enamored of them. Gallup also runs a seasonally adjusted version that puts it much closer to BLS figures. It's not exactly the same as the BLS numbers, but its seasonal adjustment uses similar techniques.

      BLS interviews 60,000 people for its monthly report; Gallup interviews 30,000 as part of its regular weekly tracking polls. BLS also collects data from more than 410,000 business establishments; Gallup collects zero.

      Don't tell me what you believe, show me what you do and I will tell you what you believe.

      by Meteor Blades on Thu Oct 18, 2012 at 09:10:25 AM PDT

      [ Parent ]

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