Jobless Claims Fall Below This Critical Level

The Department of Labor’s Unemployment Insurance Weekly Claims Report was released this morning for last week. Today’s 397,000 number takes us below the 400K level, where it had been for 27 of the last 30 weeks. The less volatile and closely watched four-week moving average comes in at 404,500 and has been above 400K for 28 consecutive weeks. Here is the official statement from the Department of Labor:

In the week ending October 29, the advance figure for seasonally adjusted initial claims was 397,000, a decrease of 9,000 from the previous week’s revised figure of 406,000. The 4-week moving average was 404,500, a decrease of 2,000 from the previous week’s revised average of 406,500.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending October 22, unchanged from the prior week’s unrevised rate.

The advance number for seasonally adjusted insured unemployment during the week ending October 22 was 3,683,000, a decrease of 15,000 from the preceding week’s revised level of 3,698,000. The 4-week moving average was 3,703,250, a decrease of 10,500 from the preceding week’s revised average of 3,713,750.

Today’s number was below the Briefing.com consensus estimate of 401,000 claims.

As we can see, there’s a good bit of volatility in this indicator, which is why the 4-week moving average (shown in the callouts) is a more useful number than the weekly data.
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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).
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Because of the extreme volatility of the non-adjusted weekly data, a 52-week moving average gives a better sense of the long-term trends.
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The Bureau of Labor Statistics provides an overview on seasonal adjustment here (scroll down about half way down).

Doug Short Ph.d is the author of dshort.com.

Learn More with Econ 101: Your Ultimate Cheat Sheet to Unemployment Numbers.

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