Over the last couple of weeks, the number of initial jobless claims dropped, allowing media outlets to speculate on a job recovery as the third quarter comes to an close in one week. Today the number of jobless claims rose again, leading to completely expected uses of the word “unexpectedly.” However, the truth is that the week-on-week changes have mainly been statistical noise, and that all of the levels have fallen within a fairly narrow band of values seen consistently throughout 2010.
But just for amusement, here’s Reuters on today’s increase:
New U.S. claims for unemployment benefits rose unexpectedly last week, government data showed on Thursday, highlighting continued labor market weakness.
Initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 465,000, the Labor Department said, breaking two straight weeks of declines.
Analysts polled by Reuters had forecast claims unchanged at 450,000. The government revised the prior week’s figure up to 453,000.
Bloomberg seems to be confused as to whether fewer or more people are drawing unemployment now (via DogSoldier):
The number of people continuing to receive jobless benefits fell by 48,000 in the week ended Sept. 11 to 4.49 million. They were forecast to drop to 4.47 million, according to economists surveyed by Bloomberg.
The continuing claims figure does not include the number of Americans receiving extended and emergency benefits under federal programs. Those who’ve used up their traditional benefits and are now collecting emergency and extended payments increased by about 208,000 to 5.17 million in the week ended Sept. 4.
In other words, the number of people receiving jobless benefits increased. The “extended and emergency benefits” are “jobless benefits,” since they are tied to unemployment. Bloomberg attempts to establish a distinction without a practical difference, and fails.
Overall, that’s also true of the changes in the initial jobless claims rate. These are distinctions without a difference. As I’ve done all year, I have charted the values to illustrate the point:
As one can see, all of these increases and decreases occur within a fairly narrow range of the overall trendline of the year. The two previous declines could be chalked up to the impact of Labor Day; in one week, employers may have held over a few more employees to handle whatever demand they predicted, and in the following week there were fewer days to file. We saw something similar but with a greater deviation for Independence Day.
What this demonstrates is the establishment of a New Normal, at least for 2010. That isn’t to say that it’s not newsworthy, especially in the political context. There is only one more unemployment report due between now and the midterm election, and this foreshadows another damaging, high number for Democrats. Further, the more that people start considering this a permanent feature of American life, the more dissatisfied they will become with current leadership. But this increase is hardly “unexpected”; it’s about as predictable as any other economic indicator. The safe bet in 2010 is to see where the last value on this chart hit, determine if it’s low or high in the range, and predict the next value as moving in whatever direction the trendline lies.