PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

This Week’s Initial Jobless Claims Report

By at 3 September, 2020, 12:36 pm

by Raymond J. Keating-

The U.S. Department of Labor’s latest report on initial jobless claims changed its measurement for seasonal adjustments, which effectively makes it a bit of a mess. But, hey, why not? After all, these are messy times.

The headline from the report is that weekly initial jobless claims, seasonally adjusted, declined to 881,000 for the week ending August 29. That was down from 1,011,000 the week earlier. While this remains a deeply troubling level, given that the level at the same point last year was 219,000, it indicates some kind of improvement, that is, pointing to things getting less bad.

For good measure, continuing claims were less bad for the week ending August 22, coming in at 13,254,000 versus 14,492,000 the previous week’s level. Still, though, that’s compared to 1,683,000 at the same point last year.

However, the total number of people claiming benefits in all programs registered 29,224,546 for the week ending August 15. That was up compared to the previous week’s 27,018,711, and of course, compared to the previous year’s 1,639,622.

However, when it comes to the decline in initial weekly jobless claims, we are left wondering how much of that was some kind of improvement, and how much of it was simply the fact that the Department of Labor shifted how it calculated seasonal adjustments without any revisions to previous week’s data. In fact, The Wall Street Journal reported:

“A Labor Department spokesman said the new methodology will be applied to Thursday’s report and those released going forward. He said data published before the Thursday release won’t be revised at this time.”

Getting the data right matters so that business owners, executives and policymakers can make decisions based on solid information. The larger story hasn’t changed, that is, employment has dropped markedly thanks to the pandemic and the government shutdowns, and uncertainty seems to stand out as the lone constant as we look ahead. But the actual numbers and trends matter.

One of the few things that government has done reasonably well over the years has been collecting and distributing data on the economy. There’s no reason why the Labor Department shouldn’t have its act together on this front.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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