Do high gasoline prices affect the number of layoffs in the United States?
Three and a half weeks ago, we announced that we were going to run a live test on the U.S. economy to answer this question, where by having the average gasoline price across the nation drop below $3.50 per gallon, the level that has come to define high gasoline prices in the U.S., we would trigger a downward shift in the established trend for the number of seasonally-adjusted new jobless claims filed each week .
With yesterday's report on the number of initial unemployment insurance claims being filed through the week ending 21 July 2012, we can confirm that a such shift has indeed taken place. Here's the graphic proof:
As we had expected, the week of the 4 July 2012 holiday played a bit of havoc in our being able to claim success for our experiment sooner, as a number of automakers delayed their annual mid-year plant shutdowns by a week, amplifying the seasonally-adjusted figure reported by the Bureau of Labor Statistics for the week ending 14 July 2012. Simply put, the BLS' statistical adjustments didn't account for the difference in the timing of the automakers shutdowns from previous years, so the figure recorded for that week is far higher than it would otherwise have been recorded if the BLS' data jocks could have anticipated the automakers' change in practice from previous years.
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