The overly excitable people come out of the woodwork again, following this morning's information-less report on weekly jobless claims. Here are two of the breathless commentary:
Business Insider: Weekly jobless claims of 435K are way better than expectations
CNN Money: Initial jobless claims tumble to 4-month low
By "way better", BI is talking about a difference between 435K and 450K. By "tumbling", CNN is talking about a drop of 24K or 5%.
Here is why the announcement this morning contains no useful "information," as in anything that allows us to conclude that the job market is any better.
The two journalists both note that the 4-week moving average (average of past 4 weekly figures) dropped by 10K. This means on average over the past 4 weeks, job losses decreased by 10K per week. So the current estimate (almost always revised with more losses) of 24K last week is in the same ballpark as the previous 4 weeks. And note that the job loss number has to decrease at this rate for the next few weeks in order for the moving average to show a decrease at the 24K level. So there is no news here at all.
The graph below clearly shows that nothing remarkable is happening in the context of the recent history of this data series; we are bouncing around the plateau of about 450K losses per week, which as economists keep telling us, is not even sufficient to deal with the influx of working-age people.
(Image from Calculated Risk).
In particular, focusing on the tail of this data series, we see that the 24K change is not "way better," nor is anything "tumbling". The reporters rob these words of their meaning when they are used inappropriately.
For those who want to explore more, the government's press release is here. You will find that the entire drop in job losses comes from their "seasonal adjustment". The raw numbers show a slight uptick in job losses from the previous week of 30K. The adjustment was about 54K fewer jobs lost. I am not saying seasonal adjustment is a bad thing but it is important for us to differentiate between the "run rate" of job losses (which is post-adjustment) and the reality of job losses (the raw count).