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Last Week's New Jobless Claims Disappoint Expectations

July 2, 2015

by Doug Short

Here is the opening statement from the Department of Labor:

In the week ending June 27, the advance figure for seasonally adjusted initial claims was 281,000, an increase of 10,000 from the previous week's unrevised level of 271,000. The 4-week moving average was 274,750, an increase of 1,000 from the previous week's unrevised average of 273,750.

There were no special factors impacting this week's initial claims. [See full report]

Today's seasonally adjusted 281K new claims was well above the Investing.com forecast of 270K.

The four-week moving average at 274,750 is approximately 8K above the 15-year interim low set in mid-May.

Here is a close look at the data over the past few years (with a callout for the past year), which gives a clearer sense of the overall trend in relation to the last recession and the volatility in recent months.

Unemployment Claims since 2007

As we can see, there's a good bit of volatility in this indicator, which is why the 4-week moving average (the highlighted number) is a more useful number than the weekly data. Here is the complete data series.

Unemployment Claims

The headline Unemployment Insurance data is seasonally adjusted. What does the non-seasonally adjusted data look like? See the chart below, which clearly shows extreme volatility of the non-adjusted data (the red dots). The 4-week MA gives an indication of the recurring pattern of seasonal change (note, for example, those regular January spikes).

Nonseasonally Adjusted Claims

Because of the extreme volatility of the non-adjusted weekly data, we can add a 52-week moving average to give a better sense of the secular trends. The chart below also has a linear regression through the data. We can see that this metric continues to fall below the long-term trend stretching back to 1968.

Nonseasonally Adjusted 52-week MA

Annual Comparisons

Here is a calendar-year overlay since 2009 using the 4-week moving average. The purpose is to compare the annual slopes since the peak in the spring of 2009.

Yearly Overlay

For an analysis of unemployment claims as a percent of the labor force, see our recent commentary What Do Weekly Unemployment Claims Tell us About Recession Risk? Here is a snapshot from that analysis.

Initial Claims to the CLF

For a broader view of unemployment, see the latest update in our monthly series Unemployment and the Market Since 1948.