Why Do We Even Bother? -- Jobs Report -- Flirting With The Highest Number in Five Weeks; Rise In American Income Almost Triples Expectations

Updates

Later, 8:26 pm: original post and subject line corrected. A huge "thank you" to three readers who noted the error. I assume the other readers noticed the obvious error and assumed it was just a typo.


Later, 3:19 pm: jobless claims go higher, income surges, spending up. -- CNBC

The number of Americans filing new claims for unemployment benefits last week stayed in a range consistent with job growth and incomes rose in December by the most in eight years, mildly positive signs for a still-fragile economy.

And that's the spin: the headline is correct -- jobless claims surge, and the story says the "number of Americans filing new claims for unemployment benefits last week STAYED in a range consistent with job growth ...."

First of all, they didn't STAY anywhere; they surged 38,000! Thirty-eight thousand increase. And this new number, CNBC says, the huge increase, is CONSISTENT WITH JOB GROWTH. The WQ: "Why, sometimes I've believed as many as six impossible things before breakfast."

And now on CBNC, from the Aetna CEO: we won't hire as many people this year as we normally would due to health reform [ObamaCare]. Cue up Connie Francis.

Later, 10:31 am: as my daughter would text, "ROTFLMAO." I've been so busy updating the blog,  I haven't been able to get to the Drudge Report until just now. And now I see Mr Obama had the same thought: "Oh, why do we even bother?" On the other hand, as Mr Drudge has noted: "Mission Accomplished!"  Mr Obama has disbanded the administration's "job council." Council, I believe includes "to talk," something this group has not done for a year. And, of course, it hasn't done anything it was tasked to do, which was to ... oh, why do we even bother?

Later, 10:14 am: one of the themes MDW has expressed since the beginning was that the spread between the "haves" and the "have-nots" was widening. The Reuters story also noted that:

In a separate report, the Commerce Department said American incomes rose 2.6 percent last month. That was the biggest increase since December 2004 and well above analysts' expectations for a 0.8 percent gain.

However, much of the increases in personal incomes over the last two months have been due to special dividends and accelerated bonuses to beat tax increases that were due to begin this month.

The big rise in incomes suggests total consumer spending power entered the new year on a stronger footing, even if the gains may not have been distributed evenly throughout the workforce.

The report also foreshadowed the possibility of another recession later this summer. 

The economy faces the threat of across-the-board spending cuts scheduled for March, as well as the possibility the government might default later this later year and trigger another recession.

Ben Bernanke's marching orders: spend, spend, spend.

Original Post

Remember: the magic number is 400,000

I'm sure it's just "one of those things," but it certainly seems the unemployment numbers are being a) manipulated; b) reported before all the data is in on; and/or, c) the analysts are really confused.

Regardless, the spin is incredible.

Look at this Reuters lede and see if you can figure out what the writer was trying to say:

The number of Americans filing new claims for unemployment benefits bounced off five-year lows last week, pulling them back to levels consistent with modest job growth.

Last week, the numbers were outstanding, though no one believed them. But had they been accurate, it would have suggested the economy was turning around, at least in terms of unemployment.

But today, the lede reads as if things have gotten even better: "Bounce" is usually associated with good news. In this case, the "bounce" referred to an increase in joblessness. Bad. "Bounce" now means "bad." [Hey, Dad, remember that 'D' I got in math last quarter. Good news, I've bounced off that low. It's now an 'F'."]

Then this: a return to "levels consistent with modest job growth."

When you actually read the report one finds that the numbers were awful -- unless you are an investor and then it's great news. As long as joblessness stays high, the Fed will keep interest rates low, making it nice for borrowers and investors in equities.

And continued lousy reports suggest to me that a) there are tectonic shifts in the economy that the mainstream media is not talking about; and, b) manufacturers (and farmers) have gotten more productive with fewer workers.

So, back to the numbers: "Economists polled by Reuters had expected claims to increase to 350,000."

In fact, drum roll. ....  the number is back to a number consistent "more modest job growth." In other words, first time claims jumped well past 350,000, jumping 38,000 to .... 368,000.

Jumping 38,000. And no unexpected holidays. No Hurricane Sandy. No nothing to blame it on. But the story at the link will relate the "crazy" patter to the zodiac the calendar of 2008.

Note:

Initial claims for state unemployment benefits increased 38,000 to a seasonally adjusted 368,000, the Labor Department said on Thursday. The prior week's claims figure was unrevised.

As noted at the top of the post, this is consistent with the government releasing figures before the data is finalized and/or "adjusted." The prior week's claims figure was unrevised. Did they ever revise it?

Back on January 10, 2013, just a few weeks ago (yes, January 10 of this year):

First time claims benefits (unemployment) jumped to the highest number in five weeks (371,000) and the four-week moving average jumped significantly to 365,750, an increase of almost 7,000. 

Let's see what the four-week rolling average was:

The four-week moving average for new claims, a better measure of labor market trends, gained 250 to 352,000, suggesting a steady improvement in labor market conditions.

Look at that, again.  New claims up by 250. Two observations: first, that's an incredibly small number for an economy the size of the US. That number sounds like it came from a New York City suburb. And then the "roundness" of that number. Not 249, or 251, but 250 exactly. Lots of rounding going on.