Meltdown 101: Which Jobs Reports Tell Full Story?

CHRISTOPHER LEONARD

One week, a federal report says the number of people filing new claims for unemployment insurance has unexpectedly dropped, pointing to a slowdown in layoffs. Good news, right? Maybe not.

Within weeks, another government report says the unemployment rate has climbed. Bad news? Not so fast: Soon a privately issued report says the labor market appears to be strengthening, news that reassures investors and sends stocks higher.

Confused yet? Don't worry — so are some of the nation's leading economists.

Gauging the labor market, and predicting where it might go, has proven to be an exceedingly difficult task during this fast-moving recession. The unemployment rate has spiked much faster than most analysts thought it would over the last year, and along the way numerous reports has given seemingly contradictory messages about the number of Americans out of work.

So which reports should be trusted, and which ones tell the whole story? Is the report on jobless claims released Thursday — which said that new claims dropped slightly to 631,000 — simply going to be contradicted by the next set of numbers? How do agencies even know how many jobs have been slashed?