Initial Jobless Claims are Stubborn

The Department of Labor’s Unemployment Insurance Weekly Claims Report was released this morning for last week. Today’s 402,000 number keeps us above the 400K level, where it has been for 27 of the last 29 weeks. The less volatile and closely watched four-week moving average comes in at 405,500 and has been above 400K for the 27 consecutive weeks. Here is the official statement from the Department of Labor:

In the week ending October 22, the advance figure for seasonally adjusted initial claims was 402,000, a decrease of 2,000 from the previous week’s revised figure of 404,000. The 4-week moving average was 405,500, an increase of 1,750 from the previous week’s revised average of 403,750.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending October 15, a decrease of 0.1 percentage point from the prior week’s revised rate of 3.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending October 15 was 3,645,000, a decrease of 96,000 from the preceding week’s revised level of 3,741,000. The 4-week moving average was 3,701,000, a decrease of 26,750 from the preceding week’s revised average of 3,727,750.

Today’s number was precisely in line with the Briefing.com consensus estimate of 402,000 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.