Did Hurricane Sandy distort last week’s jobless claims data? Possibly. One argument is that the storm kept people away from the unemployment offices and so last week’s decline in new filings for unemployment benefits dispensed an artificially low number. “Extreme weather can hold down filings initially, with people initially preoccupied,” says Jim O’Sullivan, chief U.S. economist at High Frequency Economics. “Claims are likely to be boosted in the next few weeks by hurricane-related job losses.”
Daily Archives: November 8, 2012
New Filings For Jobless Benefits Continue To Decline
Jobless claims dropped again last week, offering more evidence for thinking that the October pop in new filings for unemployment benefits wasn’t a statistical harbinger of cyclical doom after all. Once again the lesson is clear for poking through this data set: remain wary of the latest update and instead focus on the longer-term trend. By that standard, the numbers suggest that modest healing in the labor market continues, a trend that’s been in force for most of the past 18 months.
Beware Of Zombie Recession Forecasts
With the election behind us and the fiscal cliff approaching, recession forecasting is in full swing again, and so it’s time once more to roll out the standard caveat—not all predictions are created equal. In fact, quite a lot of the opinions are of poor quality, largely because one or more of the following applies: 1) the predictions are driven by emotion; 2) the analysis relies on cherry-picking the data; 3) the analyst is generally misreading and abusing the economic signals and models; 4) the analysis is overly focused on recent data that’s probably infected with short-term/seasonal distortion; 5) the analyst has another agenda to promote that conflicts with objective macro analysis.