Error! Error! Will Robinson--this morning's initial claims numbers don't mean the economy is suddenly stronger

10/11/2012 6:06 pm EST


Jim Jubak

Founder and Editor,

Sometimes the numbers don’t mean what they seem to mean.

This morning the Department of Labor reported that initial claims for unemployment fell to 339,000 for the week ended October 6. That would be a significant drop from the 369,000 claims in the week ended on September 29 and it would be the lowest level of initial claims since January 2008—except that it was all a statistical error.

The drop wasn’t a result of the economy suddenly getting better but of a misleading seasonal adjustment due to a surprising drop in initial claims from a single state that threw the normal seasonal adjustment process into a tizzy resulting in an overstated drop in initial claims.

It’s likely that the initial claims number for this week continued to rumble along in the 350,000 to 400,000 range that has been typical for 2012. We’ll know what the number actually was in a few weeks when the seasonal adjustment error drops out of the data.

In the meantime, I think it’s fair to think that the U.S. economy continues to muddle along with real, but very modest growth. Things didn’t suddenly get better over night. But neither is the economy slipping back into recession.
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