March 18, 2019

Labor Dept. Reports Plunge in Jobless Claims, Then Says Figures Were Flawed

The reported figure, which estimated that jobless claims had dropped to 292,000, about 31,000 fewer than the week before, seemingly suggested that the economy was finally entering a self-sustaining recovery on the back of a healing job market.

The number, however, is unreliable, the government said, skewed by upgrades on two state computer systems that caused those states to underreport claims. The total number of initial jobless claims is almost certainly higher than reported, though nobody knows the scope of the mismeasurement at this point.

The data malfunction has called into question the accuracy of a major leading indicator, one scrutinized by investors, economists and policy makers alike. It also shined a light on the imperfect and often outdated systems that states and the federal government use to provide benefits to workers and cull data on the labor market and the broader economy — a situation that some experts warn might become even worse because of the $1 trillion in budget cuts spread over 10 years known as sequestration.

The Labor Department would not confirm which two states had issues or guess as to the scope of the mismeasurement. But Nevada confirmed that it had not reported complete claims data to the federal government because of a computer upgrade.

“When we get data, we have an obligation to put it out there,” said Jason Kuruvilla of the Labor Department, explaining why the department did not wait rather than release incomplete data. He emphasized that the department did not recommend reading too much into any one week’s figure, at any rate.

“One week is not a trend,” he said. Mr. Kuruvilla said the two states that had misreported data would become more apparent after new state-level jobless claims data were released next week.

But some outside experts had scathing words for the Labor Department, and others described the data problem as not a one-time issue but a symptom of a chronic lack of money for one of the most critical functions of the government.

Rick McHugh of the National Employment Law Project, a nonprofit group in Washington, noted that unemployment insurance programs are partly financed by the federal government but administered by the states.

“This is a symptom of a longstanding problem with the unemployment insurance programs,” Mr. McHugh said. “These are state agencies, but they’re funded by federal dollars. And governors don’t see them as their agencies. They’re orphans.”

Many state unemployment agencies have struggled to keep up with the demands of their rapidly expanding and changing rolls through the recession and the tepid recovery.

Sequestration has only made matters worse, as benefit cuts this year for the long-term unemployed required state to retool their systems.

Nevada has struggled to carry out the across-the-board 5 percent cut to a federally financed program for the long-term jobless. States that put the cut in place partway through the fiscal year, which ends on Sept. 30, trimmed many recipients’ benefit checks about 11 percent. Nevada, which cut its checks only recently, did so by nearly 60 percent.

Problems with the computer system caused the mixup in reporting, said Mae Worthey, a public information officer with the Nevada government. “It wasn’t a glitch,” she said. “It was just implementing a new system.”

Economists said the reporting problems made it harder for experts and officials to keep track of the economy. That is especially critical now, as the Federal Reserve prepares for a crucial policy meeting next week.

“Officials should be completely transparent when they know that bureaucratic issues are distorting their data,” wrote Justin Wolfers of the Brookings Institution. “Such transparency would allow economists to provide simple statistical fixes, making the data more reliable and useful.”

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Wealth Matters: An Argument for Focusing Charity Dollars

But these requests for money, from the checkout line to the mailbox, can pull well-intentioned people in too many directions and turn an act of generosity that should lift the spirits of the donor and help a worthy cause into another stressful obligation.

This onslaught and a story I was told this week — more about that later — got me thinking about the argument for focused giving, for picking an area that you care about and putting most of your philanthropic dollars into it. This is something my wife and I have done for many years and have found very rewarding: it has made us more knowledgeable, passionate and involved in the area we support.

Patrick Rooney, associate dean for academic affairs and research at Indiana University’s School of Philanthropy, said he did not want to deter people from giving away their money however they wanted. But he added, “You’re better off to target three, four or five charities and give larger gifts to a small number of charities as opposed to giving a large number of small checks.”

Part of the reason is that a single larger gift could do more good. But that was not the only benefit. “From the recipient organization’s perspective, having a gift from $1, $100, $1,000, to $100 million, there are some transaction costs,” Mr. Rooney said. “You’ve got to book it, deposit it, acknowledge the donor and cultivate the donor for future gifts. If you have a lot of checks for $5 and $10, you have a lot of transaction costs for a relatively small gift.”

The other side of this debate is equally valid: it’s your money, and if you want to give a little bit to 27 different groups, that’s your choice. As Melissa Berman, president and chief executive of Rockefeller Philanthropy Advisers, told me: “Philanthropy is voluntary. When someone tells you how your money is supposed to be used and in what proportion, that’s called a tax.”

I can appreciate both sides. But I spent this week talking to a group of people focused on one cause — breast cancer research. Their desire to support this cause, which has had great success, made an interesting argument for being more selective with donations. Here’s the story.

THE LUNCH Addressing about two dozen women over lunch in late November, Leonard A. Lauder, chairman emeritus of Estée Lauder, told how he had bought his wife, Evelyn, a piece of jewelry every time she finished a round of chemotherapy and they thought she was better.

Mrs. Lauder, who learned she had breast cancer in 1987 and survived it, started the Breast Cancer Research Foundation in 1993, with the goal of raising funds for research that would eradicate the disease. Last year, she died of ovarian cancer.

A few weeks before she died, Mr. Lauder said, he found her standing in their kitchen one night wearing a ring he had bought her.

“She said, ‘I’ll never have a chance to wear this ring. so I’m wearing it tonight,’ ” Mr. Lauder told me. “When she died, I had all this jewelry. I didn’t feel right giving it to someone. I thought, ‘What should I do with the jewelry?’ ”

He decided to auction it off and give all the money to the foundation. He said he got Sotheby’s to waive the commission it charges sellers so that any money raised would go to a new fund at the foundation to focus on the genetic links between different types of cancers.

Among those in the audience of prospective bidders that day was Cindy Citrone. Mrs. Citrone’s mother and father died of cancer, and she is active in various cancer charities in Connecticut, where she lives. She also sits on the board of visitors of M. D. Anderson Cancer Center in Houston. Cancer charities are something she and her husband, Rob, who runs a hedge fund, support in many different ways.

She was moved by Mr. Lauder’s account of how he wanted his gifts to his wife to be passed on as part of a continuing contribution to the fight against cancer. “After hearing him tell this story of love and the legacy of joy,” she said, “I came home and wanted to be part of it.”

This article has been revised to reflect the following correction:

Correction: December 21, 2012

A picture caption with an earlier version of this column misspelled the surname of the Breast Cancer Research Foundation’s scientific adviser. He is Larry Norton, not Nortan.

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