Steep Drop In Initial Jobless Claims After Government Estimates Data From Two States

unemployment line

I thought there was finally some good news to report on a Thursday morning. Initial jobless claims fell to an astonishing 341,000 after the numbers last week were revised up to 368,000. Granted, anything over 300,000 is still pretty bad, but this means the economy is moving in the right direction. Doesn’t it?

Well, not exactly. It seems the government just made some data up for two whole states, blaming it on a blizzard that happened on a Friday night.

Today, we just got an initial claims print of 341K, far below expectations of a 360K number, and even more below last week’s upward (of course) revised number of 368K. On the surface- great. Until one reads the actual release: “Jobless claims for Connecticut and Illinois were estimated by the Labor Department, a spokesman said as the figures were being released.” Because apparently, the “blizzard upset the application process.” And there you have it. The government no longer even pretends to collect data when pulling numbers out of thin air and seasonally adjusting it. Now it literally makes up numbers, and then seasonally adjusts it. Since the number is now nothing but noise, there is no point to even comment on it. (Read More)

Well, there you have it. But of course, some are celebrating this news.

A slower pace of dismissals indicates demand is strong enough for companies to maintain headcounts, a necessary first step toward bigger job and income gains needed to accelerate consumer spending. Further strides in employment would augment advances in the stock market and housing, helping ease the burden of higher payroll taxes on household budgets.

The drop in claims “signals better times ahead for the job market,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. Sweet is the best forecaster of jobless claims over the past two years, according to data compiled by Bloomberg. “We just need much stronger job growth to propel the economy on to the next stage.”

Gee, ya think?

Next week when claims soar again I’m sure they’ll blame that on the blizzard, too.