Thursday, May 05, 2011

Jobless Claims Spike Due to Seasonal Adjustment?

Scott Grannis has a post today about the spike in weekly jobless claims, which could likely be the result of a faulty seasonal adjustment factor.   Looking at other measures of jobless claims, including continued claims displayed in the graph above, the trend is still downward, suggesting a gradually improving labor market.  Scott provides a graph showing ongoing declines also in the total claims and emergency claims, and concludes that "there has been no sudden deterioration in the real world."

11 Comments:

At 5/05/2011 12:04 PM, Blogger Ironman said...

Two quick observations:

1. It's not just this week's new jobless claims figure that's an aberration with respect to the previously established trend - last week's data would also qualify on that count. Here's a closer look at how out of place those values really are with respect to that trend, and see here for a discussion of the major trends since 2006.

2. There are other factors that are dominating the continuing claims numbers, namely, the expiration of extended unemployment benefits eligibility for very large number of people who were laid off in late 2008 and early 2009. This is the major driver behind the improvements seen in these figures since December 2010, and we know that's the case because of the simultaneous reduction in the number of people counted as being part of the U.S. workforce.

Given how large those layoffs were, we can expect the continued claims figures to continue declining a while longer, even with the uptick in new unemployment insurance claims.

 
At 5/05/2011 12:15 PM, Blogger morganovich said...

funny, we didn't see you posting about jobless claims being held down by seasonal adjustments in the last several releases, mark.

you can't use them when they support you and then ignore them when you don't.

 
At 5/05/2011 12:43 PM, Blogger juandos said...

Hmmm, smells like political spin to me...

From Stone Street Advisors: About Those Initial Jobless Claims “Anomalies”

Ever notice that when economic numbers “disappoint” its always because of some one-time, special circumstance that seasonal adjustments failed to account for (and why should we “adjust” for them, even if we could?)? Over the past two years, some of the BS excuses I’ve seen have ranged from plausible to impossible, and everywhere in between.

 
At 5/05/2011 12:51 PM, Blogger Rufus II said...

There's no doubt but that high gasoline prices are causing the economy to "stall out;" however, something that might be being overlooked, due to Wall Street's inability to see beyond, er . . Wall St is the Flooding Mississippi.

This is a swath of economic inactivity approx. 50 miles wide, and 2,000 miles long right through the heart of the Country's Commerce, and Agriculture.

We had 10,000 people laid off last week in Tunica County, alone. Interstate 40 is closed, for God's sake. Business has come to a standstill all along the Ohio/Mississippi River Systems from, I guess Evansville to New Orleans. Grain isn't being shipped. Oil/gasoline isn't being shipped. Farmers aren't out working. Restaurants are closed. 24 hr gas stations are closing at night. The River Valley is a walking zombie.

 
At 5/05/2011 2:43 PM, Blogger Benjamin said...

Core inflation near dead, commodities tumbling like 10-pins. Real estate dead. We are doing a Japan, and Bernanke won't commit to QE3.

You ever wonder why the Bank of Japan snuffed out the Japanese economy? Listen to the right-wing mau-maus in America on inflation. Listen to bondholders crying about the value of a dollar. These guys need diapers. Instead, they have microphones.

We can re-name our country, "The United States of Nippon."

Take a long look at Japanese real estate value--then sell your whole portfolio, because in 20 years it will be worth 75 percent less.

How many of you will feel better off when your stock and real estate portfolios are down by 75 percent?

 
At 5/05/2011 3:39 PM, Blogger PeakTrader said...

This comment has been removed by the author.

 
At 5/05/2011 3:48 PM, Blogger PeakTrader said...

This may be the weakest economic recovery in U.S. history.

There was a "soft-patch" in 2010, and we're in another soft-patch in 2011 (e.g. based on 1.8% real growth last quarter).

Within the next few months, will this soft-patch get worse, will the slow recovery continue, or will the recovery accelerate?

 
At 5/06/2011 6:13 AM, Blogger juandos said...

"Core inflation near dead, commodities tumbling like 10-pins. Real estate dead. We are doing a Japan, and Bernanke won't commit to QE3"...

QE2 is Damaging the Economy and Reducing GDP Growth

'QE2 is going to go down as one of the worst monetary policy initiatives in the history of the modern Federal Reserve era. On almost any metric applied, QE2 ends up not only falling well short of its proposed goals, but actually turns certain metrics like GDP growth negative compared with the prior quarter, and heading in the wrong direction'...

 
At 5/06/2011 8:28 AM, Blogger morganovich said...

banji-

no matter how many times you repeat that stupid, debunked argument, it will not become true.

japan is a demographic issue, not a monetary one. you have the causality backwards.

can you show me one example ever of a country that successfully inflated out of a recession?

ps.

core inflation is a BS metric. do you not eat or drive?

MIT BPP is running at an annualized rate of over 7% so far this year. both import and export prices are up double digits yoy. and somehow you believe the the rest of the economy is magic and not included in these trends. even the heavily adulterated CPI doubled in q1 from q4 and is nearly 2X our 2% target.

get your head out of the sand. i think you'll find you can see more clearly.

at the moment, it's clear you wouldn't know inflation if it bit you.

 
At 5/07/2011 8:56 AM, Blogger VangelV said...

funny, we didn't see you posting about jobless claims being held down by seasonal adjustments in the last several releases, mark.

you can't use them when they support you and then ignore them when you don't.


Of course he can. It is his blog and he can do what he wants on it. Mark knows that it is often hard to see things as they are so he wants to present as positive a picture as possible even if he is wrong. This is why he ignores the 'adjustments' that do away with the very real price increases for goods and services and why he jumps on any positive countertrend that he sees and projects it forward.

It is clear that we all have a particular point of view as well as incomplete data. It is also true that regional and personal experience can lead us to valid conclusions that are not applicable in general. As an academic with a secure job and with little experience with grocery stores, tuition or insurance fees, direct health care costs, etc., it is not surprising that Mark can't see the fact that the BLS reports are not valid. And as someone with little experience in how futures markets work and unaware of the underlying fundamentals it is clear that Mark is too easily swayed by noise, particularly when the financial media feeds his delusions.

I for one am grateful for people like Mark. While many of his comments are very insightful and clearly on the right track the errors that he and others in academia and the financial media commit help keep the markets more profitable for those that can see reality a little clearer than they can.

 
At 5/09/2011 9:29 PM, Blogger Nick said...

We'll see how transitory these one-time additions are this Thursday and next Thursday.

 

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