Department of Labor Omits State of California from Unemployment Report

Via Business Insider:

After this morning’s surprisingly positive jobless claims number was released, three things happened:

  1. Lots of people felt better about the economy
  2. Democrats cheered because they thought the number would help Obama
  3. Republicans seized on confusing reports that the numbers had “excluded claims from one large state” (probably California) and blasted the number as wrong and misleading.

Since then, the argument has raged on, and there have been a variety of different reports and interpretations.

Well, we’re glad to say that we’ve finally gotten to the bottom of what happened.

We spoke to an analyst at the Labor Department. According to this analyst, here’s what happened:

  • ALL STATES WERE INCLUDED in this week’s jobless claims. Assertions that “a large state” was excluded from the report are patently false.

HOWEVER…

  • It is likely that some of the jobless claims in one large state–California–were not included in the claims reported to the Department of Labor this week.  This happens occasionally, the analyst says. When a state’s jobless claims bureau is short-staffed, sometimes the state does not process all of the claims that came in during the week in time to get them to the DOL. The analyst believes that this is what happened this week.
  • California claims that were not processed in time to get into this week’s jobless report will appear in future reports, most likely next week’s or the following week’s. In other words, those reports might be modestly higher than expected.
  • The analyst believes that the number of California claims that were not processed might have totalled about 15,000-25,000. Thus, if one were to “normalize” the overall not-seasonally-adjusted jobless claims number, it would increase by about 15,000-25,000.
  • This week’s “normalized” jobless claims number, therefore, might be about 355,000-365,000, not the 339,000 that was reported. This compares to the 370,000 consensus expectation.

In other words, had all of California’s jobless claims been processed in time to make the jobless-claims release, this jobless number would still have been better than economists were expecting–but not as much better as it appeared.

Again, the as-yet-unprocessed claims will appear in future reports. So next week’s number may well be higher than expected.

So, who’s right about today’s jobless claims number?

It seems everyone’s right!

  • Jobless claims were better than expected, even after adjusting for a possible unusual anomaly
  • There may have been an unusual anomaly that made this week’s jobless claims look better than they would otherwise have been.
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