Jobless claims drop steeply, skewed by autos

[ProSense]

Jobless claims drop steeply, skewed by autos

WASHINGTON (Reuters) – The number of U.S. workers filing new claims for jobless benefits fell sharply last week but the data was distorted by an unusual pattern of layoffs in the automotive industry, which amplified the decline.

The Labor Department said on Thursday that initial claims for state unemployment insurance fell 52,000, the largest drop since December, to a much lower-than-expected seasonally adjusted 565,000 in the week ended July 4, from 617,000 the prior week.

It was the lowest reading since January. Analysts polled by Reuters had forecast claims to drop to 605,000 from a previously reported 614,000.

However, in a sign of ongoing employment weakness, so-called continued claims of people still on jobless aid after an initial week of benefits rose by 159,000 to a record 6.883 million in the week ending June 27, the latest for which data is available.

A Labor Department official said that there had been far fewer automotive and other manufacturing layoffs last week than anticipated on the basis of past experience of claims over July, when many plants are commonly idled.

more

[grantcart]

1. Does that mean that had it not been for the auto layoffs that the number would

have been even lower?

[MercutioATC]

3. It means that jobless claims ROSE, but "seasonal accounting" shows them decreasing.

If the automakers had made their traditional seasonal layoffs (which they didn't because they made so many "UNseasonal" layoffs) the number would have been even worse...probably enough that even the "seasonally adjusted" numbers would have shown an increase in claims.

[ProSense]

5. Wrong,

Good Seasonally-Adjusted New Unemployment Claims Number | Reuters

The 4-week moving average for new claims declined by 10,000 to 606,000, the lowest reading since February. This measure is closely watched because it irons out weekly volatility, and it has now declined in four out of the last five weeks.

[MercutioATC]

8. Oh no, I'm right: (from another source)

The advance number of actual initial claims under state programs, unadjusted, totaled 577,506 in the week ending July 4, an increase of 17,612 from the previous week. There were 401,672 initial claims in the comparable week in 2008.

http://www.dol.gov/opa/media/press/eta/ui/current.htm

...unless you'd like to refute the Department of Labor's press release...

[uponit7771]

31. Yeap, also people SHOULD be looking at U6 unemployment not U3. You have to look at ...

...U6 rates during depressions (which we're officially starting since this is the second longest length of job losses in US history) because people start falling off UE benefits and our U6 rate doesn't account for them.

[Beacool]

33. You are correct.

If most of the auto industry lay-offs hadn't occurred in the spring, and last week hadn't been cut short due to the holiday, the unemployment rate would have been higher.

:(

[MercutioATC]

2. You left out this tidbit:

(from the same article)

"The "seasonal factors" the department uses to adjust the data to provide a better sense of the underlying trend had expected a large increase in claims in the latest week. Actual claims in fact rose by a much smaller amount, which when seasonally adjusted, generated a large fall."

Claims actually ROSE, but seasonal accounting practices turned what was actually an increase into a large decrease.

[ProSense]

4. Search the OP for "seasonally adjusted." Now why do you think the text you linked to changes

anything? The practice is standard, and with or without it, there was still a drop.

[MercutioATC]

6. Is English not your first language?

The excerpt I posted is a paragraph from the article in your OP that you chose not to include.

"Actual claims in fact rose by a much smaller amount, which when seasonally adjusted, generated a large fall."


Jobless claims ROSE. Yes, seasonal accounting is a standard practice, but that doesn't change the fact that this initial jobless claims number is HIGHER than the last was. That's MORE initial jobless claims, not less.

[ProSense]

7. It obviously is yours.

Claims have been rising by smaller and smaller amounts. Get it?

[MercutioATC]

9. The U.S. Department of Labor disagrees with you.

The advance number of actual initial claims under state programs, unadjusted, totaled 577,506 in the week ending July 4, an increase of 17,612 from the previous week. There were 401,672 initial claims in the comparable week in 2008.

http://www.dol.gov/opa/media/press/eta/ui/current.htm

[ProSense]

10. No, it doesn't

In the week ending July 4, the advance figure for seasonally adjusted initial claims was 565,000, a decrease of 52,000 from the previous week's revised figure of 617,000. The 4-week moving average was 606,000, a decrease of 10,000 from the previous week's revised average of 616,000.

You can read it any way you choose, but it represents a decrease in the projections. You are isolating a number that supports your negative posture.

[MercutioATC]

11. The simple truth is that more people filed initial unemployment claims.

That's an INCREASE in initial unemployment claims regardless of how it's spun.

...especially when you consider that the adjusted numbers that look so "good" were figuring in a bunch of autoworker layoffs that have already happened...


However you slice it, this is a NEGATIVE report.

[ProSense]

12. BS. Become informed

Continued claims increased to a record 6.88 million.

The four-week average of weekly unemployment claims decreased this week by 10,000, and is now 52,750 below the peak of 13 weeks ago. It appears that initial weekly claims have peaked for this cycle.

However the level of initial claims (over 600 thousand 4-week average) is still very high, indicating significant weakness in the job market.

As a reminder, when looking at this report, I'd focus on the 4-week moving average of initial claims, not continued claims.

link

It's not a magic report, it's reality: the economy is still weak, but things are moving slowly in the right direction.

[MercutioATC]

13. I think we can all draw our own conclusions from the actual numbers.

If you want to call this an improvement, feel free...but if you're going to cite an article, you might consider posting the parts of it that explain the larger picture.

[ProSense]

15. Oh brother. n/t

[uponit7771]

32. No they're not, they're moving slowing in the WRONG direction. Slowly but its...

...still the wrong direciton.

Saying "less bad" is crazy when there's no end to the "less bad" in sight.

We're not in an inventory recession its a credit recession because of consumer balance sheets, this is the second longest length of job loss in US history during a recession.

[uponit7771]

14. ****THEY DIDN'T ACCOUNT FOR SHORT JULY 4TH WEEK****

[MercutioATC]

16. ...which, since the actual numbers show an INCREASE in claims....

...probably would have made the picture even worse.

(unless you believe that somebody bucked the trend and hired a LOT of people on Friday)

[Clio the Leo]

17. Did they not know it was coming?

This is the part of the argument I'm having a hard time buying.

[uponit7771]

28. It was footnoted IIRC

[ProSense]

18. Was this sarcasm?

Every July 4th there is a short week, whether it's in the middle of the week or a the Monday after or Friday before the holiday.

[Clio the Leo]

19. No, that's the honest truth.....

... I saw it mentioned in another article and Erin Burnette mentioned in this morning on Morning Joe.

As I said above, that makes absolutely no sense.

[ProSense]

21. Like I said,

every July 4th week is a short one. Economist making projections weren't surprised.

Stock Futures Slightly Higher On Better-Than-Expected Jobs Report

[Clio the Leo]

22. I know......

.... you should have heard the way the MSM tried SO hard to spin this report like it was bad news.

I half way expected them to say, "but the fireworks scared them and they kept losing count!"

I LITERALLY had a Frenchie Cat moment and was all ready to fire off an email to MSNBC.

[grantcart]

23. I think that is what the seasonal adjustment does, adjusts for unusual calendar events

[MercutioATC]

25. Actually, that's one thing it doesn't do.

It adjusts for traditional seasonal employment events, such as retailers hiring extra help around the holidays and auomakers laying off people in June/July.

[Dr.Phool]

27. Bingo!!!!

They also don't include people on EXTENDED BENEFITS in those numbers.

[uponit7771]

30. RIGHT!!! U3 Rate roll off is still occuring even though the UE benefits were extended for 6 months

...via Obama stimulus package signed earlier this year.

[Clio the Leo]

20. Here's the part that I find the most comforting...

The 4-week moving average for new claims declined by 10,000 to 606,000, the lowest reading since February. This measure is closely watched because it irons out weekly volatility, and it has now declined in four out of the last five weeks.

And this, which says the same thing in another article...

The Labour Department reported the four-week moving average, considered a more representative indicator of unemployment trends, declined 1.6 percent to 606,000 claims.

http://www.google.com/hostednews/afp/article/ALeqM5gY7GnvzrW0DPh8JDIWo7-BBl0VWw

[JTFrog]

26. Doesn't comfort the 4 unemployed people in my house.

Just saying... :shrug:

I'm not blaming the job market on Obama. I think in time he's gonna get a handle on it.

But after Bush took office there was no real calculating. Just fuzzy math that no one has cleaned up yet. Do you really think we're going to get an accurate number anytime soon? If they actually reported how many people are out of work right now without all the filters added in, panic would probably set in.

[uponit7771]

29. Those are still U3 rate numbers not U6 numbers, the U6 numbers are more important

...now because the length of time we've lost jobs is now going to be the second longest in history (18 months) and people are rolling off the dole.

Also the 565k was "initial" claims not continuing claims and you can't get initial counts when there's a closed day for the feds. Seasonally adjusted is another measure count for the U3 rate not initial claims.

Continuing claims ROSE 159k which is more evidence (other than every IC report not counting short weeks) that the loss is still there.

Obama will eventually learn if he doesn't capitalize the consumer due to banks unwillingness and his unwillingness to make them, then his admin will be in for a long hard slog.

Only 20% of the stimulus has been spent so we'll see, that other 80 HAS to go somewhere

[LittleBlue]

24. So much for green shoots

There's not much anyone can do. It's just the market flushing out all the fluff/voodoo added during the debt bubble.

[Beacool]

34. They withered on the vine?

:shrug: