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Weekly jobless numbers conflict with employment trend

Steve Chiotakis Dec 29, 2011

Steve Chiotakis: The Labor Department says jobless claims were up by 15,000 last week, to 381,000. Now that’s still below the critical 400,000 level, indicating some job growth. But it was a surprise jump given the lower trend over the past few weeks.

Richard DeKaser is deputy chief economist at the Parthenon Group. He’s with us now from Washington. Hey Richard.

Richard DeKaser: Good morning.

Chiotakis: The first time we’ve seen a rise out of these jobless claim numbers. What do we take from this latest report?

DeKaser: I think it’s important to take it with a grain of salt. These weekly numbers are notorious volatile, especially during the holiday season when employer behavior is erratic and the government has to do some mathematics to adjust the numbers, it’s always suspect. That’s why economists look at the four week moving average, and that actually continued to decline and is at its lowest level in more than a couple of years. So, my counsel is, don’t pay so much attention to each weekly move — look at the trend, the trend remains downward.

Chiotakis: The four week moving average down to the lowest level since June of 2008. Now, do these weekly numbers accurately gauge where the country’s job market really is? Or are we just paying more attention because the economy is still pretty fragile?

DeKaser: I think they’re giving us a pretty good signal right now. You know, no one economic indicator should be taken on its own, but we’re starting to see a variety of labor market indicators moving in the same direction.

For example, the National Federation for Independent Businesses — representing small and medium-sized business — in November announced that its members were hiring more, or planning to hire more, also, than they had in a little over two years. So we’re starting to get some consensus now and I guess that’s a good word for the holiday season.

Chiotakis: Richard DeKaser, from the Parthenon Group. Richard, thanks.

DeKaser: My pleasure.

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