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Earlier this morning, we learned that weekly initial jobless claims fell to a 5-year low of 330k. This was much lower than the 355k economists were expecting.So, is this reason to cheer?
According to a research firm cited by the Wall Street Journal’s Vincent Cignarella, this week’s number may be skewed.
…a small San Francisco research firm suggests it has more to do with the fact that California, whose 38 million population gives it the biggest workforce in the nation, hasn’t filed its claims numbers for past two weeks.
That meant the state’s bean counters had to come up with a guesstimate — and by Southbay Research‘s reckoning, they may have come up with too low a number.
Cignarella reports that a labour Department analyst confirmed that California and Virginia provided estimates for the latest report. That same analyst noted the labour Department had to make its own estimate for Hawaii after the state didn’t provide data.
Last October, a surprise drop in jobless claims had many people chattering about a data conspiracy. At the time, a labour Department analyst explained to Business Insider that the report may have excluded claims that weren’t processed in time for the release. The big state in question was California.
But this doesn’t mean that underestimation means those claims just disappear for good. Rather, those claims should appear in a latter claims report. In other words, if this week was underestimated, then last week’s number should see a jump.
Read more at WSJ.com.