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MATH IS HARD! Help Me Understand, please!



April 28, 2011 – Comments (5)

I need a little help understanding the financial media.  Today's jobless claims numbers rose to 429,000 (probably to be adjusted to 439,000 by next week), but the more interesting factoid from the article was this statement:

"Jobless claims below 400,000 are associated with steady job growth." - April 28, 2011
SOURCE: Reuters

What I need a little help with is this other story about weekly jobless claims, it claims that the weekly jobless claims came in at 372,000 [this story was from three years ago (April 17, 2008)] .  Based on the quote above my simple mind would associate 372,000 as "steady job growth".  But in this other story I read

"Economist Steve Affinito said the weekly job claim numbers remain a negative datapoint for the economy. "The evidence is certainly building that the United States is in or certainly is approaching a recession" SOURCE: Daily Finance

As the average American my math skills are equivalent to a Singaporean 1st grader, but I'm pretty sure 372,000 is < 400,000.  Or is less than >?  

Whatever, my question is how can 372,000 jobless claims three years ago indicate a recession is coming, but 399,000 today indicate "steady job growth".

MATH IS HARD! Should I just give my money to a financial planner who could probably make better sense of these numbers?  Thanks in advance!

5 Comments – Post Your Own

#1) On April 28, 2011 at 11:28 AM, miteycasey (29.03) wrote:

They are stating trends.

The 372,000 was probably up from 360,000 the previous week so they saw it as a negative.

Kinda like $3 gasoline. If the previous year gas was $4 then it's cheap. If it was $2 the previous year it's now expensive even though it's the 'same' $3. 


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#2) On April 28, 2011 at 12:33 PM, davejh23 (< 20) wrote:

These commentators just pull these numbers out of thin air.  The commonly referenced "healthy" level has changed several times in the last few years.

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#3) On April 28, 2011 at 12:45 PM, BillyTG (28.98) wrote:

Here's the real ridiculousness of it. Those numbers are INITIAL jobless claims? That is 400,000 NEW people filing for UNemployment EVERY week, and it counts only those filing for unemployment.  Even more lost their jobs. 

Now, by my math, how can we have "steady growth" unless NEW employment is exceeding the new jobless claims?  Once you factor in the unemployed people who are no longer counted (because they stopped collecting unemployment), and factor in the tens of millions of jobs exported over the last decade, it should become clear that there is absolutely no recovery.  Bernanke said as much yesterday (though he used heavily, politically-safe, words to say so).  It is mathematically IMPOSSIBLE for the EMployed percentage to recover this decade.

The bottom line is that we have tens of millions of unemplyed, a growing population, and a shrinking EMployed demographic. Fewer people supporting more people.  And yet, you'll still find politicians, bankers, CEOs, and CAPS players arguing how we're "recovering." Thank God we have a few politicians and CEOs who are calling it like it is. 

 Everyone needs to pick up a copy of 1984 to see the similarities.

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#4) On April 28, 2011 at 1:02 PM, rfaramir (28.65) wrote:

The idiocy of paying people NOT to work is just astounding. You just get more unemployment.

Add to that NOT ALLOWING people to work for less than some arbitrary wage set in DC. That makes it more difficult for minorities, disabled, new immigrants, the elderly, the young, the feeble to get jobs, which adds to unemployment.

Add to that the government-backed right to forcably violate someone's private property and sit there, occupying it (union strikes/sit-ins). The only solution is to go out of business, which hurts employment.

Supposedly, what they're doing to our money (debasing it) helps employment, but I don't see it. Fix the above problems and End the Fed.

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#5) On April 28, 2011 at 1:19 PM, davejh23 (< 20) wrote:

Q1 GDP growth missed expectations...ex-inventories, we're below 1%, and Q2 is likely to be negative.  Should have seen this coming with just about everyone cutting their GDP growth estimates in half in the last month.  Jobless claims are rising again, home prices are falling, Walmart CEO sees no recovery as shoppers run out of money and sales continue to decline.  Yeah, I'm feeling great about the market's prospects for further gains!  QE2 ending as scheduled as the economy contracts...throw in some weak earnings for Q2 and the market will crash...if the dollar turns around at the same time, I wouldn't be suprised to see the '09 lows.  Best case?...we hold steady...but only if the dollar falls through the floor.

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