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October 30, 2003

Rising UI Claims- Falling UI Claims

Here's an odd riddle--

For the last three weeks, the Labor Department has announced that unemployment claims had fallen from the week before.

Also, for the last three weeks, unemployment claims jumped from the week before.

It's called the magic of "revised" numbers. They announce a lower number from the week before, then revise it later in the week so it was actually higher. The Bureau of Labor Statistics is pretty independent, so I don't suspect any conspiracy, but the media should be a bit savvier.

"WASHINGTON, Oct 30 (Reuters) - U.S. Labor Department
report of initial state jobless benefit claims, seasonally
Week Ended Initial Claims 4-Week Avg. Continued Claims
10/25/03 386,000 388,750 Unavailable
10/18/03 391,000-R 393,500-R 3,566,000
10/11/03 390,000 392,250 3,509,000-R
10/04/03 388,000 395,000 3,625,000-R"

What is phenomenal is that the economy can post a a 7.2% growth rate in GDP for the quarter, yet appear to be treading water on employment.

This economy has been essentially injected with financial steroids-- radically low interest rates fueling house refinancing and massive deficit spending -- yet employment barely budges. If this is all we get with this kind of financial injections to the economy, what happens when interest rates rise and the initial tax cut round fades?

Posted by Nathan at October 30, 2003 11:36 AM