Labor Department Reports Stunning 10% Drop in Jobless Claims …(After Large State Is Not Counted)
Jobless claims unexpectedly dropped b 10% today.
But later it was reported that one “large state” was not included in the total.
Initial Claims Tumble To 339K Lowest Since 2008, Far Below Lowest Expectation (Zero Hedge)
The Wall Street Journal reported:
An unexpected shift in seasonal reporting by one state sent jobless claims tumbling last week.
Initial jobless claims–a measure of layoffs–were down by 30,000 to a seasonally adjusted 339,000 in the week ended Oct. 6, the Labor Department said Thursday.
Raw figures show claims typically drop toward the end of the quarter and spike at the start of the next quarter. A worker may decide to wait to file until the end of the quarter in efforts of boosting the weekly check because the amount is based on a rolling average of income before the layoff. As a result, there can be a bulk of claims that are not processed until the turn of the quarter.
The Labor Department factors this trend into its seasonally adjusted figures. But last week, a Labor economist said one “large” state didn’t report additional quarterly figures as expected, accounting for a substantial part of the decrease. The official wouldn’t disclose which state, but said it would be released with next week’s report as usual.
“One omission by one state–you wouldn’t think it would be a big deal, but in this case it drove the number down by 10% ,” said analyst Stephen Stanley with Pierpont Securities.
Economists are speculating the state could be California, the most populous state in the nation.
“It was likely a state with a large population and we suspect that it was California based on the occasional massive swings that have occurred in its claims data in the past,” said Daniel Silver, an economist with JPMorgan, in a note.