March 31, 2011

AP Uses Economist’s Dubious ‘Undeniable’ Improvement Assertion to Frame Tepid Unemployment Claims Report (See Update)

UPDATE, April 1: Joshua Shapiro, who is “quoted” in the AP article covered in this post, has emailed me and informed me of the following —

  • Christopher Rugaber did not speak with him, but instead used text from “a written note that I (Shapiro) produced after the jobless claims report was released.”
  • Shapiro is unhappy at my making it appear that he is fooled by establishment press reports. Although I framed my assertions in “if” and “might” to make it clear that I really didn’t know, I regret implying that possibility, though of course I had no idea that Rugaber didn’t even speak to him.

By using the word “said” without contextualizing it, Rugaber gave readers every reason to believe he spoke with Shapiro. Per Shapiro, he didn’t. Rugaber used information that Shapiro framed in a much longer-term context to make current news appear better than it really is. Rugaber’s AP report is even more risible than indicated in the post which follows.


This morning, the Associated Press’s Christopher Rugaber, in his 9:14 a.m. coverage (saved here at my web host in case it’s revised, as well as for fair use and discussion purposes) of today’s weekly unemployment claims release by the Department of Labor, found an economist whose reaction was to get all pumped up about the job market:

“The downtrend … is undeniable,” Joshua Shapiro, chief economist at MFR Financial Inc., said. “We believe that this improvement will continue in the weeks and months ahead.”

While one of course hopes for improvement in the coming weeks and months, the existence of an “undeniable” downward trend is questionable, as seen below:


(Source data: March 24; March 17; March 10; figures going back more than three weeks can be found using the tool at this DOL web page.)

Perhaps other readers have better eyesight than yours truly, because if there’s an “undeniable” trend in the direction of “improvement,” I’m having a hard time seeing it.

That noted, it’s easy to see how Mr. Shapiro might be fooled, as the press has reported that unemployment claims have dropped during each of the past three weeks, while failing to notice that the revision of last week’s number from a seasonally adjusted 382,000 to 394,000 changed what had been a decline into an increase. So if Shapiro is only internalizing initial press reports without going through each week’s numbers in detail, he would of course believe that the situation has been consistently getting better. Trouble is, it hasn’t been. I should note that DOL incorporated changes in its seasonal adjustment factors going back four years into today’s report, and that those changes were responsible for about two-thirds of the 382K to 394K change; but regardless of the source, last week’s initial claims figure changed by a lot, and in the wrong direction.

Based on DOL’s record of upwardly revising initial week reports, it’s more than a little likely that today’s reported week-over week decrease will also turn into a week-over-week increase.

The AP’s Rugaber was among those failing to explicitly notice last week’s swing from positive to negative in his report today, saying only the following about today’s: “That’s the second decline in three weeks.” He did note an uptick in the moving four-week average, but not its degree (up 3,250 to 394,250, a number close enough to 400,000 that Rugaber might have wanted to avoid revealing it).

CNNMoney’s Ben Rooney noted the degree of the revision to last week (“Last week’s total, for example, was revised up by 12,000″), but failed to note that it turned what had been a decrease into an increase. So did this Reuters “Instant View.” Experts consulted by Reuters were far more muted in their enthusiasm (“a marginally weaker report for the labor market”; “we’re just not at the kind of pace we need in order to get employment back to normalized levels”).

Speaking of “normalized levels,” AP’s Rugaber seems to have lowered the bar for real improvement, especially when one compares it to the standard of an expert quoted at Reuters:

  • Rugaber — “Applications near 375,000 or below are consistent with a sustained increase in hiring.”
  • Michael Mullaney, quoted at Reuters — ” one thing we’ve been looking at is that we have to get claims in the 250,000 area to be considered normal again.”

That’s a very big difference. It seems that Rugaber, like other AP business and economics reporters, is trying to define a decidedly non-ambitious “new normal.”

Cross-posted at



  1. It gets even better.
    Check out the two charts in this article and see if you see the things I see.

    Comment by Virgil Bierschwale — March 31, 2011 @ 1:17 pm

  2. #1, this may not be a futuristic video, it may be our current situation:

    Comment by TBlumer — March 31, 2011 @ 3:17 pm

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