Many people, including me have been writing that the jobs number reported last week and the surprisingly low new unemployment claims number reported this morning were too good to be true. In the last couple days here and in my October newsletter I partially explained why.
Now, it comes to light that a large state did not turn its quarterly papers. Wow, no wonder jobless claims dropped! Not only were they missing a large input but the DOL does a “seasonal adjustment” that also skewed the numbers. Expecting to see the normal spike in claims at the start of the quarter, it adjusted the numbers down as to allow for that. Together with the missing state report those combined for a number that gave the administration a huge and rather timely boost.
Not saying its a conspiracy but it is interesting that the DOL in its notes on the numbers made no mention of missing a large state’s report. Think that might have been important? A whistleblower brought it to light.
Also, remember that the unemployment report has two components, a survey of businesses and a survey of households. The household survey is the one that drives the unemployment rate and it reported a gain of 873,000 jobs in September while the business survey showed only 114,000 new jobs, actually worse than the recent months averaging about 150,000.
Why on earth the household survey was so extremely out of whack I don’t know. It is even stranger when you consider that the line known as U6 that lists the total unemployment rate, including those who are seeking full-time jobs but working only part-time was unchanged in September.
So, the headline number has the largest monthly increase in employment in 4 years and a huge drop in the unemployment rate but the more inclusive number in the same report is unchanged during the same time? Hmmm. Things that make you go hmmmm.