The market knows this number is bogus: if the numbers were really this good, Janet Yellen would feel comfortable "raising rates" and when the Fed "raises rates" the market will get clobbered. So, what's the market doing today? Future are up. This is unexpected with a plunging unemployment claims number.
This certainly caught folks by surprise. First, the median estimate was 300,000 -- a most reasonable number. Second: the jobless claims usually move up or down by 5,000; sometimes as much as 15,000, but that is very rare. When I saw this plunge of 43,000, something seems way off. It will be interesting to see what the revised number is next week. In addition, the plunge does not square with all the layoffs in the oil and gas sector as well as other data suggesting firms are laying off folks.
Scroll through the weekly numbers: page 1; page 2; page 3; and page 4. A plunge of 43,000 to 265,000 just does not compute. Back in May, 2014, there was similar "strangeness," but nothing even close to this "43,000" plunge:
- May 29, 2014: seasonally adjusted -- drops an incredible 27,000
(way more than forecast) down to 300,000; lowest level since 2007.
Four-week average down to 311,500. That's down almost 12,000. and they
say the four-week average is less volatile. LOL.
May 22, 2014: surges 28,000 -- wipes out last week's rise of 24,000, almost double what analysts forecast. Back up to 326,000; 4-week average now at 322,250.
May 15, 2014: plunges 24,000; at seven-year low; to pre-recession levels; 4-week moving average drops 2,000 to 323,250.
May 8, 2014: first-time claims plunge 26,000 but four-week moving average actually increased, to a 324,750, a third straight gain.
The latest drop may have been exaggerated by the federal holiday, which likely slowed the processing of some claims.We won't know any more next week:
- processing of claims this week will be even farther behind with the snowstorms/blizzards
- folks in New England weren't able to get out of the house this past week to file unemployment forms
- the Super Bowl mania this week and into next week will further disrupt data
Job Watch: Posted Earlier
Bloomberg: Link here to what seems to be a very, very fishy number.
Jobless claims plunged by 43,000 to 265,000 in the week ended Jan. 24, the lowest since April 2000, a Labor Department report showed Thursday in Washington. The median forecast of 51 economists surveyed by Bloomberg called for 300,000. The week included the Martin Luther King holiday, which makes the data more difficult to calculate, a government spokesman said as the report was released.
The Labor Department revised the prior week’s reading to 308,000 from an initially reported 307,000.
The four-week average of claims, a less-volatile measure than the weekly figure, dropped to 298,500 from 306,750 in the prior week.
The number of people continuing to receive jobless benefits declined by 71,000 to 2.39 million in the week ended Jan. 17. The unemployment rate among people eligible for benefits held at 1.8 percent during that period, today’s report showed.Comment: there almost seems to be something bogus or surreal about this number. The jobless claims usually move up or down by 5,000; sometimes as much as 15,000, but that is very rare. When I saw this plunge of 43,000, something seems way off. It will be interesting to see what the revised number is next week. In addition, the plunge does not square with all the layoffs in the oil and gas sector. Something seems very, very fishy.