Besides the fact that most of the net new jobs created last month were part-time jobs, which isn’t a realistic gauge in measuring our recovery, the reason for the massive drop in jobless claims is because the BLS forgot to include California in their report. Henry Blodget at Business Insider reported that he “spoke to an analyst at the Labor Department. According to this analyst, here’s what happened: ALL STATES WERE INCLUDED in this week’s jobless claims. Assertions that “a large state” was excluded from the report are patently false.”
Yet, he wrote that:
- It is likely that some of the jobless claims in one large state–California–were not included in the claims reported to the Department of Labor this week. This happens occasionally, the analyst says. When a state’s jobless claims bureau is short-staffed, sometimes the state does not process all of the claims that came in during the week in time to get them to the DOL. The analyst believes that this is what happened this week.
- California claims that were not processed in time to get into this week’s jobless report will appear in future reports, most likely next week’s or the following week’s. In other words, those reports might be modestly higher than expected.
- The analyst believes that the number of California claims that were not processed might have totalled about 15,000-25,000. Thus, if one were to “normalize” the overall not-seasonally-adjusted jobless claims number, it would increase by about 15,000-25,000.
- This week’s “normalized” jobless claims number, therefore, might be about 355,000-365,000, not the 339,000 that was reported. This compares to the 370,000 consensus expectation.