Beware of the False Claims About Jobless Claims
Submitted by CARPE DIEM
WASHINGTON, Jan 29 (Reuters) - The number of people remaining on the unemployment benefits roll after drawing an initial week of aid, or continued claims, rose 159,000 to a higher-than-forecast 4.776 million in the week ended Jan 17, the most recent week for which data is available. The Labor Department said this was the highest reading since its records on this series began in 1967.
MP: There’s a little problem here. The size of the labor force has doubled since 1967, which distorts the comparison of today’s continued claims to past years (the chart above illustrates this issue using the labor force vs. initial jobless claims). Consider 1982, when there were 4,713,000 continued claims (lower than today), but there was also a much smaller labor force (110.744 million) than today (154.447 million). As a percent of the labor force, the continued claims in 1982 represented 4.256% of the labor force. Given our labor force today, it would require 6.57 million continued claims to reach the same 4.256% level as 1982, or an additional 1.8 million people.
Bottom Line: Adjusted for the size of the labor force, we’re still nowhere close to a record for continued unemployment claims. But that reality won’t stop the media from reporting “record jobless claims,” there are already dozens of new stories with that “false claim” about “record claims.”
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