When it comes to the establishment media — and the economists in their address books — their chief weapon is surprise (and a fanatical devotion to The One):
The number of U.S. workers filing new applications for unemployment insurance unexpectedly surged last week, while producer prices increased sharply in January, raising potential hurdles for the economy’s recovery.
The rise in jobless insurance claims dealt a setback to hopes the economy was on the verge of job growth and could increase political pressure on President Barack Obama, who has made tackling unemployment his number one priority.
This surge in claims puts a damper on the last report, in which the unemployment rate dropped unexpectedly. However, it is consistent with the recent trend of unemployment news being “unexpectedly” bad again and again and again and again and again and well, you get the picture:
“Initial claims have been flat over the last three months. That means the improvement in the labor market is much slower than suggested by the headline GDP figure,” said Harm Bandholz an economist at Unicredit Research in New York.
“That shows GDP growth is artificially inflated by government stimulus and the inventory cycle rather than driven by final demand, which usually goes hand in hand with an improvement in the labor market.”
Indeed, the jobs purportedly “saved” by the government were largely in the government, not the private sector. And the 5.7% annualized growth in GDP for the fourth quarter of 2009 was mostly the result of a slowdown in liquidation of inventories; actual growth was much lower.
Reuters notes a number of reasons, including the recent snowpocalypse that hit broad sections of the country, as reasons to expect a weak report. Yet somehow, the bad news on unemployment continues to be unexpected. Go figure.