Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Bad Reporting of Initial Unemployment Insurance Claims Data Continues
Rick Santelli of CNBC, much as I admire his reporting on the bond markets, reported this morning, November 23, 2011, that seasonally adjusted initial unemployment insurance claims during the previous week amounted to 393,000 an increase of 2,000 from the previous week’s figure, hardly anything to get excited about. He was quoting from the weekly release by the US Department of Labor (Secretary Hilda Solis). The actual number of claims was included in the report but Santelli did not mention that it was not 393,000 but 437,049 an increase of 74,214 over the previous week, an alarming figure. Investors are not served by deficient reporting of economics data.
The week before Thanksgiving should have the same adjustments in seasonal factors from one year to the next so I decided to take a look at the 2010 figures. In the week ending Nov 20, 2010, the seasonally adjusted initial claims amounted to 410,000, a decrease of 29,000 from the previous week. The unadjusted figure was 462,813, an increase of 55,345. The unadjusted numbers of initial claims indicators a year ago were as favorable to economic growth prospects as this year’s data were as negative about the economy’s future prospects. While initial claims for unemployment compensation are only one factor is predicting the prospects of the economy, they should not be ignored by investors. They are an important indicator of the job market.
It seems to me that the actual figures should be reported by the media.
I wrote CNBC (and the Wall St. Journal) suggesting they report the actual figures. Investors ought to know the facts, not someone’s interpretation of the facts, which is what the seasonal adjustment of weekly data is. I wrote Secretary Solis suggesting that she reverse the order of presentation of the data and show the unadjusted number of initial claims first so that it would be reported by the media. Although I received an acknowledgement of receipt of my e-mail, my suggestion was apparently rejected. Investors and reporters should ignore the seasonally adjusted figures and go to the Bureau of Labor Statistics (BLS.com) site for the actual data.
Another instance of bad reporting is foreign trade data. Reporters, analysts, and government spokesman are often quoted about the jobs created by exports without any mention of the jobs lost from imports. Foreign trade in the national income accounts always includes imports. There is no excuse for such omissions.
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