New Jobless Claims: Better than Forecast and the Lowest 4-Week Average Since May 2000 [Dow Jones Industrial Average]

jobsDoug Short: Here is the opening statement from the Department of Labor:

In the week ending November 1, the advance figure for seasonally adjusted initial claims was 278,000, a decrease of 10,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 287,000 to 288,000. The 4-week moving average was 279,000, a decrease of 2,250 from the previous week’s revised average. This is the lowest level for this average since April 29, 2000 when it was 273,000. The previous week’s average was revised up by 250 from 281,000 to 281,250.

There were no special factors impacting this week’s initial claims. [See full report]

Today’s seasonally adjusted number at 278K was below the Investing.com forecast of 285K.

The four-week moving average at 279K is the lowest in over 14 years — since April 29, 2000.

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.

Click to View
Click for a larger image

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.

Click to View
Click for a larger image

Occasionally I see articles critical of seasonal adjustment, especially when the non-adjusted number better suits the author’s bias. But a comparison of these two charts clearly shows extreme volatility of the non-adjusted data, and the 4-week MA gives an indication of the recurring pattern of seasonal change in the second chart (note, for example, those regular January spikes).

Click to View
Click for a larger image

Because of the extreme volatility of the non-adjusted weekly data, a 52-week moving average gives a better sense of the secular trends. I’ve added a linear regression through the data. We can see that this metric continued to fall below the long-term trend stretching back to 1968.

Click to View
Click for a larger image

A Four-Year Comparison

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

Pages: 1 2

Leave a Reply

Your email address will not be published. Required fields are marked *