Time for another overanalyzed report on new unemployment claims; more thoughts on the meaning of the numbers

Every week, as Thursday rolls around, the media look at the most frequently available jobs number, new unemployment claims, and examine it microscopically to divine hints of economic hope or worry. Sometimes it’s all in the eye of the beholder. FindLaw (Reuters) reports: “Jobless Claims Drop Less Than Expected”

The number of Americans filing initial claims for jobless aid dipped last week, the government said on Thursday, but the drop was much smaller than expected on Wall Street.

First-time claims for state unemployment benefits fell 9,000 to 353,000 in the week ended April 17, the Labor Department said.

While the decline would normally suggest the pace of layoffs had eased, a sharp rise the week before made the figures harder to interpret. . . .

While initial claims slipped last week, a four-week moving average of filings, which smoothes weekly fluctuation to provide a better picture of underlying trends, rose by 2,250 to 347,000.

It was the second straight gain in the four-week average and brought the reading to its highest level since late February, suggesting the pace of layoffs was no longer slowing. Read more

I’m passing this news on as a public service (?), but am getting a bit peeved at the excessive focus on relatively small changes in one direction or another.

I was already writing this blawg last year when I heard it repeatedly said that anything under 400,000 would be viewed as an indicator of jobs recovery. Now we’ve been solidly and consistently below it, and they no longer even mention that “benchmark” number.

And I recall a long-ago school lesson in the difference between precision and accuracy. These numbers, to the thousands (probably rounded by Reuters from a more precise BLS number) seem quite precise. But are they that accurate as an indicator of the “health” of the jobs market or the overall economy?

Speaking of which, thanks to my Google News searching, I ran across this interesting article in an out-of the-way-source — Wisconsin Technology Network: “In our changing economy, ‘just-in-time employment’ masks job creation numbers” (byTom Still)

Maybe it’s not a “jobless recovery,” after all. Perhaps it’s just a matter of how we count 21st century jobs. . . .

The U.S. Labor Department survey hasn’t changed much since 1939 . . . . [T]he payroll survey doesn’t count a number of workers who fall into other categories crucial to today’s economy.

The ranks of the self-employed have grown by 650,000 in just two years, according to another Labor Department survey that counts total household employment rather than payroll figures. In addition, there are limited liability companies (LLCs), a new form of business that is surging. There’s also the rise in the number of consultants, such as people who formerly worked on a company’s payroll but who switched to a free-lance or “outsourced” consulting role.

Those kinds of discrepancies help to explain why the economy appears to be gathering steam but the creation of traditional payroll jobs is lagging. The Labor Department’s household survey reported a record employment level of 138.3 million as of March – about 600,000 more working Americans than the same month in 2001. The payroll survey shows 323,000 fewer jobs today than in November 2001. . . .

Precisely because the economy has changed, payroll numbers may never roar back the way they did after past recessions. In part, that’s because businesses have figured out how to produce more goods, services and profits with fewer full-time workers. . . .

[I]t is a fact of working life. It’s why more Americans are retraining for jobs that are harder to “downsize” or automate, or returning to school to start a new career. It’s also why so many more Americans are self-employed or forming their own companies. While being your own boss is demanding, you can usually trust the person at the top. Read more