For the second time in less than a week surprising jobs numbers came into play. This morning the Labor Department reported a four-year low of 339,000 first-time claims.



Some claimed this validated last Friday's jobs report, a silly notion because the two are not that closely related and a single week of data is meaningless.



I still think Friday's jobs report will be revised away, but I am positive today's "surprising" report will be (for the simple reason California forgot to report 30,000 claims).



Please consider Jobless Claims Data Skewed Downward.



Initial jobless claims, which are a measure of the number of people recently laid off, fell by 30,000 to a seasonally adjusted 339,000, the lowest level in more than four years.



But the Labor Department spokesman said the numbers were skewed by one large state that underreported its data. The spokesman declined to identify the state, but economists believe California is the only state large enough to have such a significant impact on the overall numbers.



According to the spokesman, the reason that state’s claims numbers fell short was because the state left out a pile of unprocessed claims related to seasonal factors around the beginning of the fourth quarter, which began Oct. 1.



In a research note, Stephen Stanley of Pierpont Securities summed up the data: “In short, this reading is worthless in terms of informing on the general economy.”

This large state has a history of reporting “volatile” numbers at the beginning of quarters and that the Labor Department has complained and tried to work with the state to more accurately report its claims but with little success.



“There is no explanation” for the volatility. “We have tried and tried to work with them. It’s like playing hardball with them,” the spokesman said.



The spokesman said that the unprocessed claims are likely to show up in the numbers in the next week or two. “We should see some sort of catch up.”

Actually, the report isn't worthless, it's simply erroneous. Add back in 30,000 claims and the number is 369,000 right about where it has been for some time.Is there a conspiracy here? Once again the answer is no.The labor department did not confirm the state was California but who else can it be?We did learn one useful piece of information today: The first couple weeks of every quarter are likely to be seriously messed up by under-reporting of claims from California.Mike "Mish" Shedlockhttp://globaleconomicanalysis.blogspot.com