BIG PICTURE: Jobless Claims Distortion Continues
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11:53 ET
=DJ BIG PICTURE: Jobless Claims Distortion Continues
19 Dec 11:53
By John McAuley
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--First-time jobless claims remained high and apparently
distorted by the seasonal adjustment process in the week ended Dec. 14.
The Labor Department reported that claims declined by 11,000 in the week
ended Dec. 14 to 433,000.
But that was a lot less than the decline of 41,000 that a survey of
economists conducted by Dow Jones Newswires and CNBC expected. The miss
reflected a second week in which claims appear to have been overstated by a
flawed seasonal adjustment process.
A new seasonal adjustment methodology was introduced in April of this year
which was "intended to identify changing seasonal patterns and, so, lessen the
volatility in the series," according to Tom Stengel, a statistician at the
Labor Department's Employment and Training Administration, which compiles the
jobless claims data. The new method was aimed at addressing the problem of
floating holidays.
"Unfortunately, the new method gives greater weight to the previous year's
pattern," said Ray Stone, of Stone and McCarthy Reasearch Associates.
The problem is that post-Sept. 11 effects lifted claims in October and
November of 2001, while a change in California's jobless benefits eligibility
shifted claims from December to January. As a result, using these patterns as a
basis for seasonal factors this year - when those effects have not been present
- understated claims in October and November and seems to be overstating them
in December.
"I look for this pattern to persist for another week and keep claims around
415,000 to 420,000 (in the week ended Dec. 21), but for claims to move down to
about 400,000 in the next week," said Stone.
By John McAuley, Dow Jones Newswires, 201-938-4425; john.mcauley@dowjones.com
(END) Dow Jones Newswires
12-19-02 1153ET |
