Thursday, January 29, 2009

Beware of the False Claims About Jobless Claims

WASHINGTON, Jan 29 (Reuters) - The number of people remaining on the unemployment benefits roll after drawing an initial week of aid, or continued claims, rose 159,000 to a higher-than-forecast 4.776 million in the week ended Jan 17, the most recent week for which data is available. The Labor Department said this was the highest reading since its records on this series began in 1967.

MP: There's a little problem here. The size of the labor force has doubled since 1967, which distorts the comparison of today's continued claims to past years (the chart above illustrates this issue using the labor force vs. initial jobless claims). Consider 1982, when there were 4,713,000 continued claims (lower than today), but there was also a much smaller labor force (110.744 million) than today (154.447 million). As a percent of the labor force, the continued claims in 1982 represented 4.256% of the labor force. Given our labor force today, it would require 6.57 million continued claims to reach the same 4.256% level as 1982, or an additional 1.8 million people.

Bottom Line: Adjusted for the size of the labor force, we're still nowhere close to a record for continued unemployment claims. But that reality won't stop the media from reporting "record jobless claims," there are already
dozens of new stories with that "false claim" about "record claims."

9 Comments:

At 1/29/2009 10:37 AM, Blogger 1 said...

One always has to be careful about using the always questionable Google...

 
At 1/29/2009 11:24 AM, Anonymous iamnorth@gmail.com said...

the workforce has doubled in order to meet productivity demands supplying all of the crap that people buy on credit. now that we can no longer squeeze the equity out of our homes and borrow from our future, we're going to stop buying all of that crap we do not need.

sadly, the continuing payments on lines of credit which provided the means to buy all of that crap are still due.

the answer?

forgive all lines of personal credit, reissue new ones, and let us all reload.

 
At 1/29/2009 11:45 AM, Anonymous Anonymous said...

Prof. Perry, can you try to provide a link to Facebook so I can post your blurbs on my page. Thank you...

 
At 1/29/2009 11:53 AM, Blogger misterjosh said...

I thought a previous poster had a good point. It might be valuable to study the percentage of people who are working out of the percentage of people who would work if they could work. That does not point so rosy a picture.

 
At 1/29/2009 12:15 PM, Anonymous Anonymous said...

Are you sure that you are comparing 1982 apples to 2009 apples when it comes to continued claims?

There are an additional 1.7 million continued claims due to extended federal benefits which takes total state and federal continued claims to 6.349 million last week.

In other words, is the 1982 data inclusive of state and federal continued claims?

 
At 1/29/2009 12:15 PM, Anonymous Anonymous said...

So why don't you adjust car sales for population growth? New home sales? Many conservatives(Larry Kudlow) cannot even understand the diffrence between nominal and real GDP growth. They think inflation is growth, if all these geniouses cannot get it how can you expect ordinary people and journalists understand it.

 
At 1/29/2009 12:40 PM, Blogger 1 said...

"Many conservatives(Larry Kudlow) cannot even understand the diffrence between nominal and real GDP growth. They think inflation is growth, if all these geniouses cannot get it how can you expect ordinary people and journalists understand it"...

ROFLMAO!

Thanks for that chuckle and maybe a course in remdial English should be in your future...

 
At 1/29/2009 5:02 PM, Blogger misterjosh said...

Perhaps we should all be studying some "remdial English".

 
At 1/30/2009 5:35 AM, Anonymous Good News Economist said...

Thanks for this dose of reality Mark. What is particularly telling here is the significant drop in the 4 wk moving average Dec to Jan...

Fortune also ran an interesting article this week on the significant number of firms that are hiring.

By expanding the sample that Fortune did out to about 100 firms we were able to extrapolate the total number of jobs being offered by the Fortune 1000 today to over 700,000 job openings. The question then remains how many job openings are further down market...

gne

 

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