New Jobless Claims: Worse Than Forecast

jobsJill Mislinski:  Here is the opening statement from the Department of Labor:

In the week ending October 31, the advance figure for seasonally adjusted initial claims was 276,000, an increase of 16,000 from the previous week’s unrevised level of 260,000. The 4-week moving average was 262,750, an increase of 3,500 from the previous week’s unrevised average of 259,250.

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

Today’s seasonally adjusted 276K new claims was worse than the Investing.com forecast of 262K.

The four-week moving average is at 262,750, up from last week’s 259,250.

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.

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? 

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