Thursday, January 17, 2013

Seasonal Adjustments

If the Bureau of Lies and Scams (BLS) wants us to keep on believing in these “seasonal adjustments” that they are making, that is want us to believe that these adjustments are based on the times of year and/or that they have any basis in rational mathematics or anything other than spreading the product of the south end of a northbound horse, then they need to quit publishing the “non-seasonally adjusted” numbers for us to compare them to.

Yes, I know, the BLS calls itself the Bureau of Labor Statistics. And yes, I know that I ended a sentence with a preposition. I certainly was taught not to do that, but efforts to avoid doing it tend to sound insufferably pedantic, so to hell with it.

“Initial jobless claims fell sharply last week to 335,000, the lowest level in five years,” we are told in a screaming headline by the LA Times, adding that this is, “a hopeful sign for the labor market.” Pop the champagne corks and tell Congress to cancel the long term unemployment benefits program.

Well, no, maybe we better hold off on that, because that was the “seasonally adjusted” number of new claims. The unadjusted number was 555,708 claims. That means that 220,708 claims, or about 40% of them, were “seasonally adjusted” away. That’s some seasonal adjustment!

And it gets even weirder. In the same week last year the unadjusted number of claims was 525,422, so this year’s unadjusted number was higher than last year by 30,286 claimants, about a 6% increase over last year. That’s a bit different than “the lowest level in five years.” What’s even more strange is that last year the seasonal adjustment was not the same 40% that it is this year, it was only 31% for the same week.

Why is the adjustment 40% for the second week of January 2013, while the adjustment is only 31% for the second week of January 2012 if they are “seasonal” adjustments? Comparing the same week of two different years, the non-seasonally adjusted number went up by 6% while the seasonally adjusted number went down by 8%.

I am not suggesting a pro-Obama plot, here. I am suggesting that the BLS does not have the slightest clue what it is doing.

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