The good news on the jobs front continued today ... until it didn't. The latest figures from the Labor Department showed that last week, 339,000 people filed new claims for unemployment insurance, 30,000 fewer than the week before—a sizable swing. But then officials dampened that good news by saying the data may have been thrown off by a big state (believed to be California) not fully reporting its data. Now, the department is saying that the numbers are legitimate as reported.
"Every state reported claims data this week," says a spokesman for the Department of Labor in a statement. "The decline in claims this week was driven by smaller than expected increases in most states and because of drops in claims in a number of states where we were expecting an increase. No single state was responsible for the majority of the decline in initial unemployment insurance claims."
The controversy seemed to throw cold water on a figure that initially seemed to reinforce the optimism from last Friday's surprisingly sunny September jobs report, which brought the unemployment rate down from 8.1 percent to 7.8 percent.
The confusion also played right into the hands of conspiracy theorists who lashed out last week, suggesting the rosy September jobs numbers were rigged to help President Barack Obama a month before the election. Former GE CEO Jack Welch lit up the Internet with a tweet that accused the Obama re-election team of Chicago-style politics.
Several news outlets today reported that officials said that one state in particular accounted for the drop because it did not fully report its claims.
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Business Insider reports that it has gotten to the bottom of the confusion. An analyst told the site that 15,000 to 25,000 claims were not processed in California last week. This slow processing sometimes happens, the site reports, when states do not have the staff to process all of the claims. This may be what happened in California.
Still, one former Labor Department official believes that a known anomaly should be acknowledged in a release, or at the very least should have been cleared up more quickly.
"Let's just for the moment say that for whatever reason, either conscious or otherwise, the alert to the fact that there was some glitch in the data that didn't get published in the release," says Patrick O'Keefe, director of economic research at J.H. Cohn and a former deputy assistant secretary in the Labor Department. "You would think that at the minimum that when someone picked up the phone and asked, 'Is there a glitch in their data?', they would have been very precise and said, 'The state of X had an administrative glitch, and it affected the reporting data.'" That kind of statement would have put any doubts to bed, he says.
A Labor Department spokesman says in an E-mail that not all states have submitted quarterly "administrative reports" that are usually collected at the beginning of October. Usually, those reports would be expected to impact this week's and next week's numbers.
If indeed California simply didn't process all of its most recent claims, the correction is likely to show up in coming reports as those claims are processed. In addition, it could mean a major jump in California’s initial claims. The state reported 2,069 new jobless claims for the week ending September 29. Adding on fifteen thousand additional claims in future weeks could dwarf that figure.
CORRECTED ON 10/11/12: An earlier version of this story stated that California posted 2,069 new jobless claims the week ending October 6. It posted that gain in the week ending September 29.