Thursday, October 11, 2012 brought an interesting unemployment claims report. The advance number fell from the previous week's 367,000 to 339,000.
It seems, magically, that the unemployment numbers waited a full four years to improve suddenly in the last few days, just when the President's reelection effort ran into trouble the first chance the American public got to compare him and Mitt Romney side-by-side.
…, the more mud is thrown at him now, the more likely people will be to say "he doesn't look as bad as he was made out to be".
Since then, "good news" on the unemployment front have been streaming. Last week, we found out that unemployment fell to 7.8% in September 2012. Now, we have the drop in the initial unemployment claims.
Here is a graph comparing the advance and revised initial unemployment claims numbers since Memorial Day this year:
The series show one other interesting period in July with a dip-spike-dip pattern. In addition, The Wall Street Journal reported:
But last week, a Labor economist said one "large" state didn't report additional quarterly figures as expected, accounting for a substantial part of the decrease. The official wouldn't disclose which state, but said it would be released with next week's report as usual.
"One omission by one state--you wouldn't think it would be a big deal, but in this case it drove the number down by 10%," said analyst Stephen Stanley with Pierpont Securities.
Economists are speculating the state could be California, the most populous state in the nation.
Whatever the anomaly is, it will probably be fixed with the next report, just like the odd national unemployment rate will be fixed with the next update.
However, in the meantime, there are two debates, including the one between Biden and Ryan tonight. You can bet those two numbers will be used by the Vice President to cloud the issue of the stagnant economic environment created by the President and the Democrats in the Congress by turning crisis management into a license to fundamentally change the structure of the U.S. economy, and expand the Federal government's footprint.
So, here is another unemployment rate graph, for some perspective.
I took Figure 1 from The Job Impact of the American Recovery and Reinvestment Plan document prepared by the President's own economic team when they were pushing the stimulus. I added the orange points to it using Table E-1. Employment status of the civilian noninstitutional population published by the BLS.
Figure 1 shows where the administration thought the unemployment rate would go with and without the stimulus. Clearly, the unemployment rate has remained even above what they thought it could rise to if the President had not been able to implement his plan.
What is more striking is the projection the President's team made about the pattern of recovery: With the stimulus, they thought the unemployment rate would be about 5.5% by now — without it about 6%.
According to the BLS, the unemployment rate in September 2012 was 7.8%.
This was touted as a great sign of success for the administration. The difference between 5.5% or 6% and 7.8% might not seem to be that big.
But, each of those percentage points corresponds to many, many people. Even taking the much deflated labor force as given, if the President's Stimulus had succeeded in bringing down the unemployment rate to 5.5% there would be about 8.6 million unemployed people today. In fact, at the end of September, about 12 million people were unemployed.
They missed the mark they set for themselves by 3.4 million people.
The U.S. Economy grew by about 1.3% in the second quarter of 2012. $4/gallon gas is another new normal. The world is getting more dangerous every day.
Are we supposed to overlook all these and other failures of the Obama/Biden administration because the first draft of some survey numbers showed changes in a positive direction right before the shot clock expired?