Behind the lower jobless claims good news

This Bloomberg article pretty much says it all.

Applications for U.S. unemployment benefits declined more than forecast last week, easing concern that employers will accelerate firings as the world’s largest economy cools.
Initial jobless claims dropped by 27,000 to 451,000 in the week ended Sept. 4, Labor Department figures showed today in Washington.

Sounds good, right? Other than the fact that 451,000 a week is nearly recessionary levels, it's still an improvement.

Well, that's not really true for a number of reasons:

#1) the drop was almost entirely due to seasonal adjustments


Jobless benefits applications were projected to fall to 470,000 from a previously reported 472,000 for the prior week, according to the median forecast of 46 economists in a Bloomberg News survey. Estimates ranged from 460,000 to 482,000. The Labor Department revised the prior week’s figure to 478,000.

So last week was actually worse than originally reported, which is typical for the BLS.


For the latest reporting week, nine states didn’t file claims data to the Labor Department in Washington because of the federal holiday earlier this week, a Labor Department official told reporters. As a result, California and Virginia estimated their figures and the U.S. government estimated the other seven, the official said.

Are you friggin' kidding me? This isn't a survey. It's an estimate by an agency that consistently has to revise their original estimates higher even when they do an actual survey. So next week's revision should be interesting.

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initial weekly unemployment claims

On every report I give a huge warning that this one is always revised, significantly, that there is so much noise you really cannot say much unless you look at the graph over a year (and yes, seasonal adjustments are also adjusted yearly!) and at minimum the 4 week average and even there this metric has a lot of noise.

If it dropped 100k well, I'd say that's worth looking at but these 20k, 30k variations to me say "oh, they are still firing people, isn't that pathetic".