unemployment drop is temporary

[terryg11]

the number of first time unemployment filers dropped in november which the media had been touting as possible evidence tht the economy could be in recovery. What I haven't seen though, is anyone saying that this drop in the unemployment numbers is occuring at the same time most retailers and many service companies like UPS hire their seasonal and usually temporary workers who then get either laid off or seriously cut back in hours sometime in mid January. Am I wrong or could that not explain the decline in unemployment? Sure, the unemployment numbers could have stayed the same or rose if we weren't in a "recovery" but I guess we'll see come February?

[NoMoreRedInk]

1. I'm pretty sure unemployment statistics, like all economic stats, are....

seasonally adjusted to remove variations such as the ones you mentioned.

[louis-t]

3. don't count on it

I don't even trust any of the numbers anymore. Sad isn't it?

[terryg11]

4. and that may be the case

but I can't for the life of me remember how they would calculate such a thing. Do they look at years past and see how many unemployment filings are done at the end of January and into February? Or do they just call up some of these companies and ask them how many people they hired on a temp basis?

[Gulf Coast J]

5. On seasonal adjustments

"How are seasonal fluctuations taken into account?

Total employment and unemployment are higher in some parts of the year than in others. For example, unemployment is higher in January and February, when it is cold in many parts of the country and work in agriculture, construction and other seasonal industries is curtailed. Also, both employment and unemployment rise every June, when students enter the labor force in search of summer jobs.

The seasonal fluctuations in the number of employed and unemployed persons reflect not only the normal seasonal weather patterns that tend to be repeated year after year, but also the hiring (and layoff) patterns that accompany regular events such as the winter holiday season and the summer vacation season. These variations make it difficult to tell whether month-to-month changes in employment and unemployment are due to normal seasonal patterns or to changing economic conditions. To deal with such problems, a statistical technique called seasonal adjustment is used. This technique uses the past history of the series to identify the seasonal movements and to calculate the size and direction of these movements. A seasonal adjustment factor is then developed and applied to the estimates to reduce the effects of regular seasonal fluctuations on the data. When a statistical series has been seasonally adjusted, the normal seasonal fluctuations are smoothed out and data for any month can be more meaningfully compared with data from any other month or with an annual average. Many of the time series that are based on monthly data are seasonally adjusted."

http://www.bls.gov/cps/cps_htgm.htm

[terryg11]

6. thanks, I figured they did something like that

just didn't know what the process was exactly. good link too

[GainesT1958]

2. Temporary hires "rule" right now...

But come January, most of those will be NON-temporary layoffs...

B-)