Jobless Claims Below Critical Level for Second Straight Week

The Department of Labor’s Unemployment Insurance Weekly Claims Report was released this morning for last week. Today’s 393,000 number is the second consecutive week of claims below 400K (it would have been the third, except for the upward revision of the November 11th numbers). The last time we had consecutive weeks below 400K was the four weeks from March 12 to April 2 of this year. The less volatile and closely watched four-week moving average came in at 394,250, the second week below 400K after 29 consecutive weeks above that benchmark. Here is the official statement from the Department of Labor:

In the week ending November 19, the advance figure for seasonally adjusted initial claims was 393,000, an increase of 2,000 from the previous week’s revised figure of 391,000. The 4-week moving average was 394,250, a decrease of 3,250 from the previous week’s revised average of 397,500.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending November 12, unchanged from the prior week’s unrevised rate.

The advance number for seasonally adjusted insured unemployment during the week ending November 12 was 3,691,000, an increase of 68,000 from the preceding week’s revised level of 3,623,000. The 4-week moving average was 3,671,500, a decrease of 2,250 from the preceding week’s revised average of 3,673,750.

Today’s number was above the consensus estimate of 391,000 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

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