CALIFORNIA: The Jobless Report Was Correct - Business Insider

California has aggressively denied the information that we published yesterday about yesterday's surprisingly positive jobless-claims report, which we got from the Labor Department.

California says the Labor Department was "wrong" that California had not processed all the jobless claims it received last week. California says that the reason California had so few jobless claims is that California's economy is surprisingly good.

In other words, California says that yesterday's apparently surprisingly good jobless report was, in fact, surprisingly good.

California published its denial in the form of an indignant press release in which it deemed the information we got from the Labor Department "bogus."

We have printed the statement in its entirety below.

But first, here's the background...

THE BACKGROUND

Yesterday, when weekly jobless claims came in at only 339,000, the best report in years and well below the 370,000 consensus, it immediately triggered a political firestorm.

Liberals howled that the report proved that the economy is on the mend and that last month's 7.8% unemployment rate was no statistical fluke.

Conservatives yelled that the jobless number was wrong because a "large state" had been excluded from the results.

We called the Labor Department to get to the bottom of the matter.

We spoke to an analyst at the Labor Department who explained what the Labor Department thought had happened. The analyst said the following:

• No states were excluded from the jobless report (this conspiracy theory was flat-out wrong)
• One large state, California, reported significantly lower claims than expected. The analyst believed was the result of the state's failure to process all its claims by the end of the week--something the analyst says is "not unheard-of," especially around the end of a quarter. The analyst said that this sometimes happens when state employment agencies are short-staffed.
• Any claims not processed last week will be processed this week or next week--they won't disappear. (In other words, this week's report might look surprisingly high).
• The analysts believed California's unsubmitted claims might have totalled 15,000-25,000. Thus, if one were to "normalize" yesterday's jobless report, it would have been about 355,000-365,000 claims, versus the 339,000 reported.

In other words, the Labor Department analyst told us that there was an unusual (but not unheard-of) anomaly in the jobless report that made it look better than it was. But the report was still better than expected, even when that anomaly is taken into account.

After reporting what the Labor Department analyst told us, we went about our business. Then the Los Angeles Times called us to say that California's employment department was having a hissy fit over our report and was going to demand a retraction. We asked the LA Times to send us California's statement, if and when it issued one.

The LA Times forward California's statement in the evening. And the State soon reached out to us as well.

California blasted what the Labor Department told us as "bogus" and said it had submitted all the unemployment claims it was "required" to submit. California also demanded an "immediate retraction." We said we would gladly add California's denial to our article, which we did. But we also told California that we had accurately reported what the Labor Department had told us, so we weren't about to retract anything.

California's statement accused us of saying some things that we hadn't said (ie, that California had "failed to fulfill a requirement") and attacked us personally. We suggested that, if the Labor Department was wrong about California not submitting all of its claims, California might want to direct its ire at the Labor Department instead of at us.

We also asked California how California could be sure that it had had submitted all of the unemployment claims it received last week. After all, we pointed out, organizations do get backed-up from time to time, especially when they're short-staffed. So the idea that California might have been backed-up didn't seem so far-fetched.

California did not respond to that question. It simply reiterated that the Labor Department analyst was "wrong" and said that its economy was better than expected--encouraging news that California attributed to good weather having delayed certain seasonal impacts.

OUR CONCLUSION

As of this morning, we still don't know who is right--the Labor Department or the State of California.

Regardless of who is right, yesterday's jobless-claims report was better than expected.

Regardless of who is right, the unexpectedly low California jobless claims last week will probably be offset by higher claims this week and next week. (Whether the lower claims were the result of good weather delaying seasonal effects, as California says, or the result of California's failure to file all claims on time, as the Labor Department says, there will likely be a "catch-up" in the future.)

We've included California's statement and our email exchange with the State below.

California's Statement:

EDD Blasts Bogus News Report on California's Jobless Claims, Demands Immediate Retraction

SACRAMENTO ? California Employment Development Department Director Pam Harris today issued the following statement in response to an un-sourced and unsubstantiated media report from Business Insider that erroneously asserts the state failed to fully and properly report unemployment insurance weekly claims data ? also known as the jobless claims report ? to the U.S. Department of Labor.

?Reports that California failed to fully report data to the U.S. Department of Labor, as required, are incorrect and irresponsible. The California Employment Development Department, which administers the Unemployment Insurance (UI) program in the state, has reported all UI claims data and submitted the data on time.

The original article also erroneously claims that there is a backlog of UI claims in California. California continues to file UI claims on a timely basis.?Data on UI claim activity is required to be reported to the Labor Department every week and California has fully complied with the weekly reporting deadlines.

It?s unfortunate this ?reporter? and others who repeated the article's erroneous statements chose to speculate rather than report, failing to confirm this information with EDD. We demand an immediate retraction and encourage writers to verify these ?stories? before publishing them."

Our statement to The Los Angeles Times:

We stand by our story, which, contrary to Ms. Harris's blustery assertions, is clearly sourced to an analyst at the Labor Department.? (The story also doesn't say what she says it says. We said nothing about California failing to fulfill a requirement. But now that Ms. Harris brings it up, maybe that's something we should look into.)

California's email to us:

Mr. Blodget ? my name is Loree Levy and I am the Deputy Director of Public Affairs here at the California Employment Development Department (EDD)l.? I believe you have been notified that we were issuing a statement in response to your un-sourced and unsubstantiated report about Unemployment Insurance claims data.? I am attaching a copy for you here and demand a retraction on your story.

I am not quite sure why you would ever report such assertions without verifying them first.? We never received a call from you here at EDD and we could have easily informed you that California has continued to report such UI claim activity timely as is required.?? If you bothered to look into the economic situation here in CA you would have learned that our unemployment rate is coming down, our jobs numbers are going up, and our weather has been unusually warm which has had some typical seasonal patterns in employment delayed.? So no, there is no surprise that our regular UI claim load is going down.

Please advise me on the status of my retraction demand.? Thank you.

Loree Levy

Deputy Director of Public Affairs

California Employment Development Department

Our email to California:

We stand by our story, which, by the way, is clearly sourced to an analyst at the Labor Dept.

We will gladly add your statement to the story.

For what it's worth, the story does not say what Ms. Harris says it says. We said nothing about CA "failing to fulfill a requirement.".?

But given that she has raised that issue, I'd be grateful if you could answer a couple of questions.

What happens if, as the Labor Dept. analyst suggested, some of your employment offices are short-staffed? How are the claims processed? Has there ever been a case when they have not all been processed in the appropriate time period? If not, why not? Other organizations get backed up sometimes--why couldn't that happen here?

Also, how can you be certain that all claims submitted last week were processed by the end of last week? What is the mechanism to determine that?

Lastly, I assume it is your contention that the Labor Dept analyst I spoke to is flat-out wrong?

Thank you.

California's email to us:

Thank you for your e-mail.? I?m sorry to hear that. The source is wrong.?? I have checked in with DOL and I would recommend you do the same. ?They can confirm that indeed CA has timely reported its UI claim data.

FINAL WORD:

To be clear, we never said that CA had not reported claims data. We said explicitly that CA HAD reported claims data, contrary to the assertions of the conspiracy theorists. What the Labor Department told us was that CA had likely not reported all the unemployment claims that were submitted last week because it hadn't processed them yet. California appears to be disputing that assertion, instead attributing its low claims to a stronger than expected economy and good weather. Either way, look for a "catch-up" in California claims next week.

SEE ALSO: We Get To The Bottom Of The Mysterious Jobless-Claims Report!

Source: http://www.businessinsider.com/california-the-jobless-report-was-correct-2012-10

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