Weekly Unemployment Claims Suddenly Jump Higher

The Department of Labor’s Unemployment Insurance Weekly Claims Report was released this morning for last week. The 27,000 increase in claims is on top of a 3,000 upward revision to the previous week’s claims. Here is the official statement from the Department of Labor:

In the week ending April 9, the advance figure for seasonally adjusted initial claims was 412,000, an increase of 27,000 from the previous week’s revised figure of 385,000. The 4-week moving average was 395,750, an increase of 5,500 from the previous week’s revised average of 390,250.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending April 2, a decrease of 0.1 percentage point from the prior week’s unrevised rate of 3.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending April 2 was 3,680,000, a decrease of 58,000 from the preceding week’s revised level of 3,738,000. The 4-week moving average was 3,728,750, a decrease of 20,750 from the preceding week’s revised average of 3,749,500.

Today’s number was much higher than the Briefing.com consensus expectation of 385,000 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 dshort.com.

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

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