Weekly Unemployment Claims: Down 16K from Last Week, Better Than Forecast

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July 7, 2016 4:35pm NYSE:DIA NYSE:SPY

Wall streetJill Mislinski:  Here is the opening statement from the Department of Labor:


In the week ending July 2, the advance figure for seasonally adjusted initial claims was 254,000, a decrease of 16,000 from the previous week’s revised level. The previous week’s level was revised up by 2,000 from 268,000 to 270,000. The 4-week moving average was 264,750, a decrease of 2,500 from the previous week’s revised average. The previous week’s average was revised up by 500 from 266,750 to 267,250.

There were no special factors impacting this week’s initial claims. This marks 70 consecutive weeks of initial claims below 300,000, the longest streak since 1973. [See full report]

Today’s seasonally adjusted 254K new claims, down 16K from last week’s upwardly revised 270K, was below the Investing.com forecast of 270K.

The four-week moving average is at 264,750, down from last week’s revised number.

Here is a close look at the data over the past few years (with a callout for the past year), which gives a clearer sense of the overall trend in relation to the last recession and the volatility in recent months.

Unemployment Claims since 2007

As we can see, there’s a good bit of volatility in this indicator, which is why the 4-week moving average (the highlighted number) is a more useful number than the weekly data. Here is the complete data series. This is the 70th consecutive week under 300K, the longest streak since 1973.

Unemployment Claims

The headline Unemployment Insurance data is seasonally adjusted. What does the non-seasonally adjusted data look like? See the chart below, which clearly shows extreme volatility of the non-adjusted data (the red dots). The 4-week MA gives an indication of the recurring pattern of seasonal change (note, for example, those regular January spikes).

Nonseasonally Adjusted Claims

Because of the extreme volatility of the non-adjusted weekly data, we can add a 52-week moving average to give a better sense of the secular trends. The chart below also has a linear regression through the data. We can see that this metric continues to fall below the long-term trend stretching back to 1968.

Nonseasonally Adjusted 52-week MA

Annual Comparisons

Here is a calendar-year overlay since 2009 using the 4-week moving average.

The purpose is to compare the annual slopes since the peak in the spring of 2009.

Yearly Overlay

For an analysis of unemployment claims as a percent of the labor force, see our recent commentary What Do Weekly Unemployment Claims Tell us About Recession Risk?

Here is a snapshot from that analysis.

Initial Claims to the CLF

 

This article is brought to you courtesy of Jill Mislinski from Advisor Perspectives.


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