Remember on Friday when unemployment rose and 190,000 jobs were lost? Floyd Norris points out that even though these events were widely reported they didn’t actually happen. Instead, according to the Bureau of Labor Statistics the number of jobs went up and the unemployment rate went down. But then a seasonal adjustment factor was applies, and put things into negative territory.
Brad DeLong was inspired to make similar observations in mid-October when the media reported that new unemployment claims had fallen when, in fact, they rose and then were seasonally adjusted into negative territory:
One issue here is that in unusual times the seasonal adjustment process based on the recent past is probably not going to give you the best results. That said, I don’t think dumping the process would help, the labor market really does exhibit a lot of seasonality. But I think responsible journalism should report both numbers fairly prominently. Even if an uptick in economic activity turns out to be purely seasonal, it’s still a real occurrence in the world.