Initial Jobless Claims Confirm Bernanke’s Pessimism About Jobs

The Department of Labor’s Unemployment Insurance Weekly Claims Report was released this morning for last week. Claims rose 9,000 from a 6,000 upward revision of the previous week, but the 4-week moving average remained unchanged. This marks the elevent week above the 400K level after dropping below 400K for seven of the previous nine weeks. Here is the official statement from the Department of Labor:

In the week ending June 18, the advance figure for seasonally adjusted initial claims was 429,000, an increase of 9,000 from the previous week’s revised figure of 420,000. The 4-week moving average was 426,250, unchanged from the previous week’s revised average of 426,250.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending June 11, unchanged from the prior week’s unrevised rate of 2.9 percent.

The advance number for seasonally adjusted insured unemployment during the week ending June 11 was 3,697,000, a decrease of 1,000 from the preceding week’s revised level of 3,698,000. The 4-week moving average was 3,709,500, a decrease of 5,250 from the preceding week’s revised average of 3,714,750.

Today’s number was above the consensus estimate of 413,000 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.

weekly unemployment 52 ma

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

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