The Department of Labor’s Unemployment Insurance Weekly Claims Report was released this morning for last week.
In the week ending Feb. 19, the advance figure for seasonally adjusted initial claims was 391,000, a decrease of 22,000 from the previous week’s revised figure of 413,000. The 4-week moving average was 402,000, a decrease of 16,500 from the previous week’s revised average of 418,500.The advance seasonally adjusted insured unemployment rate was 3.0 percent for the week ending Feb. 12, a decrease of 0.1 percentage point from the prior week’s unrevised rate of 3.1 percent.
The advance number for seasonally adjusted insured unemployment during the week ending Feb.12 was 3,790,000, a decrease of 145,000 from the preceding week’s revised level of 3,935,000. The 4-week moving average was 3,892,750, a decrease of 54,750 from the preceding week’s revised average of 3,947,500.
Today’s number was close to the Briefing.com consensus expectation of 408,000 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). For more specific insight into the adjustment method, check out the BLS Seasonal Adjustment Files and Documentation.
Doug Short Ph.d is the author of dshort.com.
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