New Jobless Claims A Bit Higher Than Forecast

April 23, 2015

by Doug Short

Here is the opening statement from the Department of Labor:

In the week ending April 18, the advance figure for seasonally adjusted initial claims was 295,000, an increase of 1,000 from the previous week's unrevised level of 294,000. The 4-week moving average was 284,500, an increase of 1,750 from the previous week's unrevised average of 282,750.

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

Today's seasonally adjusted 295K new claims was above the Investing.com forecast of 290K. The four-week moving average at 284,500 is off its interim low of 282,250 set the week ending on April 4th.

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.

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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.

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The headline Unempolyment 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).

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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.

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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. The latest data point is 2,000 above its interim low set the week ending April 4th.

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.

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

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