NEW YORK (
) -- Traders that wrote tickets on Thursday after the U.S. Department of Labor (DoL) released initial jobless claims based their orders on a report that was - at best -- iffy.
Nine states did not forward their jobless claims information to the DoL by time the numbers were released at 8:30 a.m. Instead, DoL statisticians relied on a methodology they argue is accurate but estimated the absent figures.
In laymen's terms, they gave a ballpark figure.
The DoL did not mention this fine point when the jobless claims were reported. As they say, it's fairly routine that some states can't to deliver the numbers when it's a holiday week. Apparently, Labor Day means that state workers don't have to do their jobs.
According to the DoL, they see no need to write a footnote alerting anyone to the fact that 9 out of 50 states did not deliver their numbers. The DoL does not seem concerned that the stock market is especially sensitive to employment figures as the recession recovery drags on and insists that it is fairly accurate in its estimates. They cite that approximate jobless claims numbers are less than half of one percent incorrect.
Cort Gwon, director of Trading Strategies and Research at FBN Securities, says that weekly initial claims data can become unreliable because of the short reporting period. "That is why most traders look at the four week moving average to see an overall trend," Gwon says. "But these days, any employment number is important as that is the number one concern for the economy."
California, one of the nine states that "phoned it in," gave its educated guess of a 4,127 decrease in claims. Not stopping there, the state went one further to validate those numbers by giving a sector specific comment saying "Fewer layoffs in the service industry".
The state can't deliver the report, but can give color commentary?
The DoL told
that the original non-seasonally adjusted number for September 4th was 376,558 and that the final number was 377,983 - a difference of less than 1500. Further evidence that no disclosure is needed, the government argues.
Millions of trades on Thursday were based on these figures. Traders should be informed that a huge portion of the report is guesstimated. Is a footnote too much to ask?
--Written by Debra Borchardt in New York.
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