Last month’s disappointing jobs report got some disappointing company this morning from the Department of Labor. The number of initial weekly jobless claims jumped up 23,000 over the level announced last week, which was itself adjusted upward by 10,000 in today’s report (via Steve Eggleston):
In the week ending April 7, the advance figure for seasonally adjusted initial claims was 380,000, an increase of 13,000 from the previous week’s revised figure of 367,000. The 4-week moving average was 368,500, an increase of 4,250 from the previous week’s revised average of 364,250.
The advance seasonally adjusted insured unemployment rate was 2.6 percent for the week ending March 31, unchanged from the prior week’s unrevised rate of 2.6 percent.
The advance number for seasonally adjusted insured unemployment during the week ending March 31 was 3,251,000, a decrease of 98,000 from the preceding week’s revised level of 3,349,000. The 4-week moving average was 3,334,250, a decrease of 35,750 from the preceding week’s revised average of 3,370,000.
This puts the weekly claims level at about the high end of the range over the last several months. It’s a big move in the wrong direction, but for the moment, it’s a one-time occurrence. This is a series with plenty of spikes and valleys, which is why the better indicator is the four-week rolling average. That jumped by over 4,000, though, which is a significant change in the wrong direction, and could indicate more rough days ahead.
How bad is this? Reuters not only breaks out the U-word for the event, they also resurrect their manufactured myth about correlation with job growth:
New claims for unemployment benefits rose last week to their highest level since January, a development that could raise fears the labor market recovery was stalling after job creation slowed in March.
Initial claims for state unemployment benefits increased 13,000 to a seasonally adjusted 380,000, the Labor Department said on Thursday. The prior week’s figure was revised up to 367,000 from the previously reported 357,000.
Economists polled by Reuters had forecast claims falling to 355,000 last week. …
Despite the rise in claims last week, both first-time applications for unemployment aid and the four-week average held below the 400,000 mark, implying job gains above March’s tally.
That’s a mild version of the 400K Myth, the notion that getting below 400K in this series correlates with high levels of job creation. It’s simply not so. In this case, Reuters offers a weaker claim that getting below 400K will result in some kind of positive job creation, which is true … but that was true above 400K as well. In 2011, for instance, we were above 400K for most of the year and had positive job-creation numbers, but not positive enough to fully keep up with population growth. It’s better to be below than above 400K for obvious reasons, but we won’t dent the current and chronic levels of unemployment until this number gets down to 325K or so.
The White House didn’t need this number today. They’re trying to argue that Barack Obama has the country on the right track to recovery, even though we are almost three full years into recovery and the jobs have not returned. The March jobs report and this sudden “unexpected” jump make it look like the Obama recovery is still moribund. If this trend continues, especially with gas prices rising, this will not be a Recovery Summer for Obama’s job approval ratings.