Former GE CEO Was Right

Updates
 

 Later, 9:33 am: the AP provides a few more details to the story below.

• The jump in jobless applications was the highest in four months.
• The increase is due mostly to technical factors [that will make the unemployed feel better: "technically, you still can't find a job."]
• The moving average rose, but "is still a level consistent with modest hiring." [one word: wow.]
• And there it is: California delayed processing last week's applications [waiting until after the second debate, no doubt]
• Applications are a proxy for layoffs; when they fall consistently below 375,000, it suggests hiring is healthy enough to lower the unemployment rate. [Okay. It appears they've moved the goal posts: it was my understanding the magic number was 400,000. Chester called me on that several months ago and that's why I put the magic number in bold at the top every week when the joblessness claims come out. I won't change the "magic number."]

Original Post

Remember: the magic number is 400,000.

It will be interesting to see how Bloomberg spins the jobs story today. [As usual, I type the data points as I read the story for the first time.]

Wow: jobless claims increased by 46,000 to 388,000. The median forecast was 365,000. [The article does not say it, but I do believe this is the largest jump in some time. It would be interesting to know how long it has been since a jump this big.]

Here's the first bit of spin (note the bold): "Revised from 342,000 the previous period that was the lowest since February, 2008." [Got that word "lowest" in the first couple of lines -- pretty good journalism to be able to do that.]

And now we get the "one state" explanation: "The typical pattern of large increases in unadjusted claims at the start of the quarter seems to have shifted by a week in one state....." --- just in time for the first debates. Wow. Perfect timing. Great news just prior to the debates; now the real numbers come out ... due to that "one state."

After that, the story just gets worse, in terms of journalism: "Outside of 'that,' we're seeing very gradual improvement in the labor market."

Very.

Gradual.

Improvement.

I don't see any "improvement."

And a jump from 342K to 388K is hardly gradual.

But it is "very." Just not "gradual." It is "very" sad. The lost decade continues.

As usual, last week's figure (339K) was revised upward to 345K.

The report is not clear on this, but the "one state" that accounts for the "funny numbers" appears to be California. Shifted their data by one week -- to come in after the first two debates.

And now the boiler plate: "The four-week moving average, a less volatile measure than the weekly figures, rose to 365,500 from 364,750..." The "rise" was inconsequential, probably not even statistically significant, nor reproducible, but whatever, the four-week moving average is moving in the wrong direction.

Very.

Gradual.

Improvement.

Not.

"The average number of claims over the past two weeks....indicating little change in the pace of findings.

Just before the debates, we had had 43 unbroken weeks of unemployment greater than 8.0%. Now this report. It will be interesting to see what the new unemployment number is -- I think it gets reported the day before the election, but I could be wrong.

Also, by the way, waiting until after the first two debates: US debt will be downgraded, according to PIMCO.  Something about "political theater."