Initial Jobless Claims Stall Before Big Unemployment Data
The Department of Labor’s Unemployment Insurance Weekly Claims Report was released this morning for last week. Initial claims came in at 400,000, a drop of 1,000 from the previous week, which was revised upward by 3,000. Last week previously had the distinction of being first week of seasonally adjusted claims below 400,000 after 15 consecutive weeks above the 400K level. But with today’s number and revisions, we’re at 17 consecutive weeks of initial claims at or above 400K. Here is the official statement from the Department of Labor:
In the week ending July 30, the advance figure for seasonally adjusted initial claims was 400,000, a decrease of 1,000 from the previous week’s revised figure of 401,000. The 4-week moving average was 407,750, a decrease of 6,750 from the previous week’s revised average of 414,500.
The advance seasonally adjusted insured unemployment rate was 3.0 percent for the week ending July 23, unchanged from the prior week’s revised rate of 3.0 percent.
The advance number for seasonally adjusted insured unemployment during the week ending July 23 was 3,730,000, an increase of 10,000 from the preceding week’s revised level of 3,720,000. The 4-week moving average was 3,729,750, an increase of 4,500 from the preceding week’s revised average of 3,725,250.
Today’s number was better than the Briefing.com consensus estimate of 405,000 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.
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).
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.
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.