By Jeffry Bartash, MarketWatch
But some economists are less willing to believe the feel-good story told by the monthly employment report. James Knightley, chief international economist at ING, said he’d rather trust data on how much the government is shelling out in benefits than a monthly report based on a survey of households.
While he acknowledges jobless claims are more prone to weekly distortions, he said “the fact that the number of people claiming benefits has been around 30 million for six weeks now suggests something distressing has been happening in the labor markets.”
He thinks there’s a good chance new claims will actually rise again soon, specially after a fresh outbreak of coronavirus cases forced some states to reimpose restrictions or delay reopening plans. Companies could also cut more jobs once they realize not all their customers are coming back.
It’s possible, economists say, that both reports tell an accurate story in their own way. The economy could be losing lots of jobs each week, but regaining more of them each month.
Still, it’s hard to square the 32.9 million people reported as claiming benefits through state unemployment offices with the 17.8 million people that the monthly jobs report indicates are still unemployed.
Various explanations abound. The claims report might include multiple applications from the same people, one theory goes. Or perhaps exceedingly generous federal benefits, including $600 extra for unemployed workers, has led to hanky-panky that’s distorted the weekly data.
Whatever the case, economists say, it will be a while before a reliable picture of the labor market emerges.
The only thing that’s clear, Faucher said, is that labor market remains in serious trouble.
“I think claims are going to remain elevated until we as a society do a better job of containing the virus.”