New Jobless Claims at 323K:
A 26K Decline from Last Week
The Unemployment Insurance Weekly Claims Report was released this morning for last week. The 323,000 new claims number was a decline of 26,000 from the previous week's 349,000 (revised from 348,000). The less volatile and closely watched four-week moving average, which is usually a better indicator of the trend, was unchanged at 365,500, a decline of 2,000 from the previous week.
Here is the opening of the official statement from the Department of Labor:
In the week ending March 1, the advance figure for seasonally adjusted initial claims was 323,000, a decrease of 26,000 from the previous week's revised figure of 349,000. The 4-week moving average was 336,500, a decrease of 2,000 from the previous week's revised average of 338,500.
The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending February 22, unchanged from the prior week's revised rate. The advance number for seasonally adjusted insured unemployment during the week ending February 22 was 2,907,000, a decrease of 8,000 from the preceding week's revised level of 2,915,000. The 4-week moving average was 2,927,750, a decrease of 14,750 from the preceding week's revised average of 2,942,500.
Today's seasonally adjusted number at 323K came in well below the Investing.com forecast of 338K.
Note from dshort: An item today in my local newspaper, the Raleigh News & Observer, makes me wonder about the extent to which the sharp drop in claims might be weather related. According to the N&O, "The head of the state Division of Employment Security says bad weather delayed processing applications for unemployment aid, but the aim is to clear the backlog by the end of March."
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.
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.
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 secular trends. I've added a linear regression through the data. We can see that this metric continued to fall below the long-term trend stretching back to 1968.
A Four-Year Comparison
Here is an overlay of the past three calendar years and the beginning of 2013 using the 4-week moving average. The purpose is to show the relative annual slopes since the peak in the spring of 2009. Last year (blue line at the bottom) hit a trough at the end of September. It then zigzagged higher to the end of the year. This year (the red series) started off with a decline but has since been hovering in a narrow range over the past eight weeks.
For an analysis of unemployment claims as a percent of the labor force, see my recent commentary What Do Weekly Unemployment Claims Tell us About Recession Risk? Here is a snapshot from that analysis.
For a broader view of unemployment, see the latest update in my monthly series Unemployment and the Market Since 1948.