If you heard a news report about the new unemployment claims for last week, you undoubtedly heard that the number dropped by 12,000 and you may have heard that the figure for the week was 377,000 new claims. Seriously, I actually heard two reports that only mentioned the 12,000 drop but not the total of new claims. In other words, it was time for the latest distortion in the reporting of this claims figure.
Let's start by making one thing completely clear. The 377,000 figure reported today will be revised next week, and that revision will certainly increase the number by somewhere between 2,000 and 10,000. For the last year, the number has been revised for all but one week, and the revision has always been up. This is a fact, not an argument. Indeed, if the revisions are supposed to reflect errors in the numbers, then the only conclusion one could draw is that the numbers are intentionally under-reported. In other words, someone in the government is trying to make things look better than they actually are. On the other hand, if there is a systematic problem that causes the initial number to be reported too low, then no one in the government is manipulating the data, but the media certainly is. What do I mean? Each week, the press reports how the current week compares to the revised figure for the previous week. In other words, this morning we were told that this week claims were down by 12,000 when the number reported is down only 6,000 from the quantity of claims actually reported last Thursday. The press is always comparing the current week's unrevised figure (which will be revised higher the next week) with the revised figure for the previous week. It is a sure fire way to make each week's results look better than they actually are.
The new unemployment claims for the week are far from the most important economic statistic each week. Even so, the data should be reported without trying to make it look better than it actually is.
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