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Ray was right! The latest jobless claims were phony. A Labor Department economist blows the whistle on the phony report.
Howard Richman, 10/12/2012

On Thursday, the Labor Department posted phony numbers for the weekly jobless claims report. In response, the stock market went up. But Ray wasn't fooled. (See his last posting.)

After the release of the report, a Labor Department economist told Dow Jones that an entire state's renewal numbers had been left out of the report without any mention within the report. Here's a selection from a CNBC article (Why Jobless Claims May Not Be as Good as Market Thinks):

While the government didn’t note any unusual factors in the release itself, a Labor Department official did tell news agencies covering the release about a quirk which partly accounted for the larger-than-expected drop.

As Dow Jones reported: “A Labor Department economist said one large state didn't report additional quarterly figures as expected, accounting for a substantial part of the decrease.”

The wording of that statement, along with the accompanying headlines, left the impression that one major state didn’t turn in its figures.

Here's what actually happened. The state did report weekly jobless claims but did not process and report its quarterly claims number (when many people have to reapply for benefits for technical reasons as opposed to being newly laid off). As a result, there wasn't the expected spike in claims that normally happens at the start of the quarter.

So there you have it. On Thursday morning, the Labor Department ran with phony new jobless claims numbers. There was no mention in the report that anything was left out. After the release, one of the Labor Department's economists revealed that the numbers were false. Was last week's 7.8% unemployment report also due to phony data?