GOOD NEWS: Weekly jobless claims drop to 9-month low. Of course, they’re still not all that low.

UPDATE: Reader Duane Simpson writes:

The unadjusted number suggests something isn’t quite right about the new 9-month low. From the report:

“The advance number of actual initial claims under state programs, unadjusted, totaled 523,642 in the week ending December 3, an increase of 151,002 from the previous week.”

That’s some adjustment! Unadjusted, we have an increase of 151,002. Adjusted we have a decrease of 23,000. Maybe I’m too cynical, but I don’t believe the number. Incidentally, the market spiked on the headline then crashed on the report.

Lots of people are charging chicanery at BLS. They may be right, but so far I’ve been unable to uncover anything.

UPDATE: The Return of the 400K Myth:

We have been bouncing between 380K and 410K for the last several weeks, which is an improvement over the level we saw this summer of 420K or so. However, this essentially brings us back to the level seen in Q1 before the impact that rising gas prices and the tsunamis in Japan had on the economy. Not coincidentally, the overall economy has returned to about the same level of health, with a stagnation-level 2.0% GDP rate in Q3. It’s an improvement, but only a marginal one, especially in the context of the continued exodus of working-age adults from the workforce and the lowest level of civilian participation in 30 years.

However, that still hasn’t kept media outlets from heralding the 400K level as an indicator of job growth, which is — as I have repeatedly shown — a myth. . . . Nowhere in this report does Reuters mention the decline in the labor force, which puts the context of the “drop” in unemployment in a completely different context. National Journal goes a little farther, claiming that going below the 400K level brings the job market into a place where it can “dent” unemployment. That is simply not so, at least not directly correlated to the 400K level. If anyone needed a check on that, all we have to do is look at the unemployment rates from Q1 when we spent several weeks at the 380K level and the jobless rate never dropped below 9%. Otherwise, we could take a look at the historical correlation between weekly jobless claims and job-growth levels, which show that we have to go much lower to indicate real job creation.

We’ll see happy talk, whether warranted or not, as the main theme until the election, at the very least.