The Perpetual Declining Unemployment Machine
This week’s initial unemployment claims, in another report released this morning, were 386,000. Since the revised figure for last week is 391,000, headlines can justly read “Jobless Claims Drop,” even though last week’s initial estimate was 386,000.
Interestingly, “Jobless Claims Drop” is exactly what the headlines also read last week, when the number of unemployment claims was… 386,000. The week before, the headlines also read “Jobless Claims Drop,” since initial unemployment claims were 384,000. The week before that? You guessed it, “Jobless Claims Dropped” down to a level of 382,000. We’ve now had 4 weeks in a row with headlines stating that “Jobless claims drop,” though the initial estimate of claims has gone from 382,000 to 386,000 over that period.
The reason? Every week the number from the week before is revised up to a number higher than the current week’s initial estimate. So the BLS has magically discovered a way for jobless claims to drop week after week, without the number of jobless claims ever actually falling.
By the way, I wonder if it’s worth mentioning to the BLS that they should probably revise their methods for reaching a preliminary estimate. Over the past 4 weeks, the estimate has been revised up by 6 thousand, 6 thousand, 6 thousand, and 6 thousand. Anyone detect a pattern?