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Jobless Claims Up From Last Week’s Report

From those masters of manipulation at the Associated Press:

Unemployment aid applications stay at 4-year low

CHRISTOPHER S. RUGABER
February 23, 2012

WASHINGTON (AP) — The number of people seeking unemployment aid was unchanged last week and the four-week average of applications fell to its lowest point in four years. The figures add to evidence that show the job market is improving.

Applications stayed last week at a seasonally adjusted 351,000, the Labor Department said Thursday. That’s the fewest since March 2008, when the country was just a few months into the recession.

This is almost a textbook case of disinformation tactics. (And we have seen it from the AP many times before.)

Last week, on February 16, 2012, Mr. Rugaber reported: "Weekly applications for unemployment benefits dropped 13,000 to a seasonally adjusted 348,000, the Labor Department said Thursday."

That number was subsequently revised up by 3,000, as it almost always is under Obama. A detail that the AP almost never mentions.

However, in today’s article, the AP happily uses last week’s revised number and compares it to this week’s unrevised number. Instead of comparing apples to apples.

Meanwhile, this time next week, we will learn that this week’s new claims actually went up even compared to last week’s revised number. But the AP will never report that news. They got the headline that they and the Obama administration wanted.

Applications have fallen steadily since last October. The average has declined 13.5 percent since then. When applications drop consistently below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.

Economists said the level suggests the economy will see another strong month of hiring in February, similar to the average net gain of about 200,000 in the previous three months…

There has not been any strong hiring. What there has been is a huge number of people being dropped from the workforce because the Bureau Of Labor Statistics has decided that they have given up looking for work and are therefore no longer unemployed.

The number of people receiving unemployment aid also fell. The total benefit rolls dropped to 7.5 million in the week ended Feb. 4, the latest data available. That’s down from nearly 7.7 million in the previous week.

How much of this decline is because their unemployment benefits have just run out?

Hiring has picked up in recent months. The economy added 243,000 net jobs in January, the most in nine months. The unemployment rate dropped for the fifth straight month, to 8.3 percent — the lowest in nearly three years…

If you like made up numbers.

And look what the AP puts at the bottom of their 16 paragraph article:

One reason the unemployment rate has fallen is that many people have given up looking for work. The government only counts people as unemployed if they are actively searching for a job.

Hopefully, nobody will bother to read to the end of the article and hear such inconvenient news.

This article was posted by Steve Gilbert on Thursday, February 23rd, 2012. Comments are currently closed.

3 Responses to “Jobless Claims Up From Last Week’s Report”

  1. Petronius

    The economy has been treading water since the financial meltdown in Sep 2008. Over this period of time, economic growth has been stagnant, unemployment has in fact grown worse, and the housing market has also become worse.

    Okun’s Law: A 3 percent increase in a country’s output (or GDP) corresponds to a 1 percent decline in unemployment. The reverse also holds true: For every 2 or 3 percent drop in the ratio of actual GDP to the full capacity GDP there is a 1 percent increase in unemployment. In other words, unemployment will rise so long as our actual GDP growth falls below potential GDP.

    We can use a sideways V to illustrate the American economy over the course of the last three years. The flat bottom line represents actual GDP since 2008; the top line represents potential GDP. As the gap widens, unemployment grows.

    Okun’s rule may also help explain why the economies of socialist countries grow poorer over time. The longer socialism is allowed to continue, the bigger the gap between actual output and potential output, the worse economic conditions become, and the longer it takes the economy to recover when socialism is finally overthrown.

    Okun’s law is confirmed when you dig down and scrub the US numbers. The recent gains in the employment rate are occurring as the result of subtracting workers rather than adding jobs through private sector economic growth. That is why the American labor participation rate has been declining to an all-time low, as millions of discouraged workers give up and leave the workforce. Thus the labor participation rate was 62.7 percent at the start of 2008, but is now 58.5 percent.

    Although these people have left the workforce, they haven’t left the country. They are still part of the American economy. So when you adjust for this decline in labor participation by examining the total working age population (age 60 and below) that is not institutionalized, you find that unemployment is really much worse now than when Nerobama took office.

    Since the meltdown in Sep 2008, we have experienced eight quarters of 0 to 3 percent growth, and six quarters of 1 to 5 percent decline. Overall the American economy has been flat, hovering around zero.

    Over this time, the actual GDP has been well below the potential GDP (full capacity trend line). When you have experienced, at best, zero to 1 percent growth per year, as we have done over the last three or four years, instead of normal growth of 3.5 to 5 percent per year, your economy is losing ground year over year with a compounding effect. As a result, the US economy’s actual GDP is currently about 12 percent below its potential GDP. This means that at the end of Nerobama’s first term in office, the US economy’s actual GDP will probably be about 12 to 15 percent below its potential GDP, i.e., at least 12 percent below where it should have been after four years. This also means there will have been a substantial growth in unemployment (a 12 percent gap results in about 6 percent added unemployment).

    Let’s assume that Nerobama and the Democrats are defeated in Nov, and that the new Republican president and Congress are able to unleash the animal spirits of American capitalism. In that case, if the economy is then able to grow uninterrupted at, say, 1 percent ABOVE its normal potential trend line, it would still take America 15 consecutive years of strong growth to get back to where it should have been without Nerobama. In other words, 15 years is probably a best case scenario for economic recovery and return to an acceptable level of unemployment.

    The longer we remain mired in the doldrums, the longer it will take us to recover. If Nerobama and his cohorts are returned to power in Nov, and double down on their anti-business, anti-growth policies, we may not expect to see the economy restored to its full potential during the careers of our grandchildren, if ever.

  2. tranquil.night

    Exactly right Petronius, thank you.

    One thing we can count on like clockwork should a Republican era begin to put us on the long road to recovery is that Liberal Pravda are going to suddenly and miraculously gain an eagle’s eye when it comes to reporting the real economic figures. Under Republicans, all those not figured into the unemployment tally now will be and it’ll be made to look like supply-side is skyrocketing joblessness while the rich cash in.

    Stagnation/stagflation, masked in Orwellian fashion or not, IS decline as you illustrate with Okun’s rule. That bottom line is a compelling visualization of the Slippery Slope we’re currently on, leading to the Downward Spiral that ends like Greece. The longer we continue treading down the path, the more the problem metastacizes, the harder it becomes to reverse. Okun’s Bottom Line reflects the Bottom Line for why the Tea Party exists.

  3. Rusty Shackleford

    99 weeks is 1.9 years. Seems to me it’s right on schedule for the people on perpetual unemployment to have given up completely. Sadly, I don’t really blame them. However, of those people, how many got any re-training for another job? How about the money that was spent for unemployment “benefits”? It certainly wasn’t used wisely. It was cast to the wind, essentially.

    I mean, when I was laid off, I went through my savings after UE ran out and I looked into state-offered re-training. I had to take an aptitude and general knowledge test. The day after I took that test, I got called for an interview. No kiddin. And in my career field as well. However, I wonder how that re-training would’ve turned out.

    Seems though that a lot of “folks” are just sitting on their behinds waiting for Godot.


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