Weekly Jobs Claims: The Spin Continues -- Can The Mainstream Media Spell "Surge"?

Updates

August 20, 2012: New York City unemployment hits 10%. Yesterday I was taken to task by "Connie" for my remarks below, suggesting that I misunderstood CNBC, Reuters, and Bloomberg. When you go to to the link regarding New York City unemployment, be sure to read the comments. 

Original Post

Remember: the magic number is 400,000

The number of Americans filing new claims surged this week.

So, how did mainstream media report this?

First: CNBC -- and I'm not kidding; I can't make this stuff up -- this is their lede:

The number of Americans filing new claims for unemployment benefits rebounded last week, pushing them back to levels consistent with modest job growth after a seasonal quirk caused a sharp drop the prior period. 

Talk about obfuscation. That's the first paragraph. On top of the obfuscation, they didn't even dare put the new numbers in the first paragraph. Wow. That, I find incredible. I simply linked to the most reliable source to find the weekly jobs number and the first paragraph: last week's "good news" -- which, by the way was not all that good.

By the way, CNBC used the word "rebound" in its headline reporting the debacle; one usually associates "rebound" with good news. The spin does not quit.

Reuters: to their credit, they did use the word "surge" but it wasn't until the eighth paragraph, farther than most folks read, that Reuters finally got around to telling how bad it was:

A second report from the Labor Department showed initial claims for state unemployment benefits rebounded 34,000 to a seasonally adjusted 386,000. A seasonal quirk caused claims to drop 24,000 in the prior week.

But then this: to make sure that "we" don't get too depressed, according to Reuters, things really aren't so bad after all:

The four-week moving average for new claims, a better measure of labor market trends, fell 1,500 to 375,500 - staying in the middle of the range it has held for much of 2012.

Bloomberg: simply "more Americans" filed, but this, according to Bloomberg, was simply due to "volatility" in the automotive sector. Don noted that automobile companies schedule annual plant layoffs every year -- that's why they're called "annual." So, from Bloomberg:

The volatility in the numbers was due to a change in the timing of annual automobile plant layoffs, a Labor Department official said as the data were released.  

But this is what I find most amazing, the very next Bloomberg paragraph:

Determining whether the labor market is improving or deteriorating has been more difficult in recent weeks because a reduction in the number of auto-plant layoffs typical at this point of the year has thrown the Labor Department’s seasonal adjustment process out of line. It may take weeks to judge the direction the labor market is taking.  

The most advanced course in economics or business that I took in college (that I recall, and not including statistics) was "Economics 101" and even with that minimum amount of education, I can tell you "whether the labor market is improving or deteriorating.... in recent weeks." In fact the 34,000 new unemployed, mostly high school graduates, can probably tell you "whether the labor market is improving or deteriorating...in recent weeks."

But having said all this, the deteriorating jobs picture was not the worse story of the day. The worse news: factory activity decreased in the mid-Atlantic states (to the best of my knowledge, GM, the big auto manufacturer, and Detroit, are not in the mid-Atlantic states, so blaming the new numbers on volatility in auto layoffs is somewhat disingenuous); business activity contracted in general from 17 to 13 percent (I guess "someone isn't building their business"); and, further, house resales dropped 5.4%.

The spin does not quit.

No one dares use the word "surge." Analysts are said to be confused by what the numbers really mean. The analysts point out that the four-week moving average is stable. The analysts were caught off-guard by the "annual" auto layoffs which occurred this year. The mid-Atlantic states were singled out as particularly challenging for manufacturing. Detroit, where the unexpected scheduled layoffs were said to have occurred, is not in the mid-Atlantic states.

By the end of the day, this jobs report will be forgotten, and 34,000 more folks will join the unemployment lines.