Weekly jobless claims rise 15K to 381K
posted at 10:35 am on December 29, 2011 by Ed Morrissey
After a few weeks of trending reduction, if not overwhelming momentum toward a net job-creation level, the number of initial jobless claims rose last week by 15,000 to 381,000. The Department of Labor also reported that they adjusted last week’s figure upward by 2,000 claims, but this report will almost certainly be adjusted by a more significant amount:
In the week ending December 24, the advance figure for seasonally adjusted initial claims was 381,000, an increase of 15,000 from the previous week’s revised figure of 366,000. The 4-week moving average was 375,000, a decrease of 5,750 from the previous week’s revised average of 380,750.
The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending December 17, an increase of 0.1 percentage point from the prior week’s unrevised rate.
The advance number for seasonally adjusted insured unemployment during the week ending December 17, was 3,601,000, an increase of 34,000 from the preceding week’s revised level of 3,567,000. The 4-week moving average was 3,598,750, a decrease of 39,000 from the preceding week’s revised average of 3,637,750.
The 4-week average is the best it’s been in more than three years, but we’ll have to wait and see what happens to this figure next week. Due to the holidays, the DoL had to estimate claims figures for seven states in this report, including Virginia and California. The latter had the highest increase in weekly claims, and a further revision could go either way. We’ll have to wait for next week to get the adjustment, but next week’s report will have the same problem, so it may be a couple of weeks before this metric gets completely sorted.
Reutersnotes that the number failed the expectations of their economists, but their headline gives a different spin: “Weekly Jobless Claims Drift Higher; Still Below Key Level”. What “key level”? The version of the article at CNBC provides no explanation of what the “key level” is or why that level is key, but Hot Air readers will recognize this as a stealth example of the 400K Myth. Reuters has insisted since at least June of this year that a 400K level in initial jobless claims correlates to net job growth beyond population expansion, and a healthy job market. As I have pointed out numerous times (originally at the link), the data does not show any correlation between the 400K level and healthy job creation, or even a hint of it — and I have repeatedly challenged Reuters to demonstrate that correlation. So far, they have ignored reality and continued to push the 400K Myth in most of their reporting on this series.
People often ask whether the opening and conclusion of temporary Christmas-season jobs impacts this metric. These are seasonally-adjusted figures, so the holiday job activity, primarily in retail, shouldn’t impact these numbers unless job creation or destruction occurs outside of the seasonal paramaters. That may be coming in the retail business, though, as Sears and K-Mart will close more than a hundred stores nationwide due to poor sales and profitability:
During the all-important holiday shopping season, it appears that Sears struggled to connect with other shoppers as well. The Hoffman Estates-based chain said Tuesday that it planned to close more than 100 Sears and Kmart stores because of soft sales, but it also had a more troubling confession: It admitted that it did a poor job of managing its business during the most important period of the year for merchants.
The Chicago-based firm got lots of support from the Illinois state government in tax breaks this year to keep its headquarters in the Windy City, but that didn’t solve the chain’s “self-inflicted” problems:
In a memo Tuesday to workers, Sears Holdings Chief Executive Lou D’Ambrosio said the retailer, which recently received tax breaks from the state of Illinois to keep its headquarters here, had “not generated the results we were seeking during the holiday.”
In part, Sears blamed the tough economy, even as the National Retail Federation said it expects holiday sales overall to rise 3.8 percent this year, to a record $469.1 billion.
But Sears, which over the years has been losing sales to fast-growing retailers such as Wal-Mart and Target, conceded that some of its problems this season were self-inflicted.
In order to save costs, the company will close the stores — and that might include their flagship Chicago location, although Sears didn’t respond to questions about its fate. Sears and K-Mart stores haven’t kept pace with other big-box retailers like Target and Wal-Mart, or Kohl’s for discounted but quality clothing. Retail is expected to have decent but not spectacular year-on-year growth this holiday season, as the Tribune notes above, but that leaves a lot of space for losers as well as winners.