I’ve never before seen the actual numbers on the “seasonal adjustments” that the government uses for various things, but I’ve always distrusted them. I basically don’t believe anything that the government, its representatives, or its politicians say to me about pretty much anything, and I’ve assumed that “seasonal adjustments” were the government’s way of concealing bad news to assure that present elected officials would be reelected.
So when The Market Ticker provided a link to the “unadjusted” numbers for yesterday it came as no surprise to me to see what the revealed.
The market was ecstatic that “seasonally adjusted initial claims” for unemployment compensation was the lowest in nine months, at 381,000 for the week and that, further, it had dropped from 404,000 the previous week. Joy from all sides, everyone, and reelect Obama in a landslide.
But wait. The “unadjusted initial claims” for unemployment, meaning the actual number of people who walked in the door and filled out applications because they lost their jobs, was 523,642 for the week and was an increase of 151,000 over the previous week.
Well now, isn’t that interesting? Instead of being a bit under 400,000, it was well over 500,000 and instead of decreasing by 23,000 it increased by 151,000. That’s one hell of a “seasonal adjustment” isn’t it? What “season” are we in that requires a 27% adjustment? And of course I know this is a stupid question, but it’s rhetorical, why are only the “seasonally adjusted” numbers reported?
I’ll bet the title led you to think this was going to be a Christmas story.