Some ten days ago, we examined in detail why the monthly job data was no conspiracy as Jack Welch maintained, but simply flawed. Similarly as David Rosenberg we said that the way the BLS obtains data for the household survey was error-prone.
Gluskin Sheff’s David Rosenberg
That the 7.8 percent jobless rate takes it to the level that prevailed when the President took office in January 2009 has raised many an eyebrow. I don’t believe in conspiracy theories. But I don’t believe in the Household Survey either.
This notoriously volatile indicator has become even more so in recent months. It showed a 195K slide in July and a 119K decline in August, to only then reveal a massive 873K surge in September.
A similar mistake happened today to the Labor Department, extracts from CNBC:
Weekly applications for U.S. unemployment benefits jumped 46,000 last week to a seasonally adjusted 388,000, the highest in four months. The increase represents a rebound from the previous week’s sharp drop. Both swings were largely due to technical factors.
The Labor Department says the four-week average of applications, a less volatile measure, fell slightly to 365,500, a level consistent with modest hiring.
Last week, California reported a large drop in applications, pushing down the overall figure to the lowest since February 2008.
This week, it reported a significant increase as it processed applications delayed from the previous week. (Read More: Why Jobless Claims May Not Be as Good as Market Thinks)
We doubted that the November jobs report, scheduled just two days before the elections, would see similar strange data, namely that after the strong fall of the unemployment rate in October caused by flawed data, it could rise again.Previous post See more for Next post
Tags: Jack Welch,Rosenberg