In the week ending August 31st, initial jobless claims were at a seasonally adjusted level of 227,000, falling to a two-month low. This represents a decrease of 5,000 from the previous week's figure and is better than the 231,000 economists were expecting.
Here is the opening statement from the Department of Labor:
In the week ending August 31, the advance figure for seasonally adjusted initial claims was 227,000, a decrease of 5,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 231,000 to 232,000. The 4-week moving average was 230,000, a decrease of 1,750 from the previous week's revised average. The previous week's average was revised up by 250 from 231,500 to 231,750.
The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending August 24, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 24 was 1,838,000, a decrease of 22,000 from the previous week's revised level. The previous week's level was revised down by 8,000 from 1,868,000 to 1,860,000. The 4-week moving average was 1,853,000, a decrease of 8,250 from the previous week's revised average. The previous week's average was revised down by 2,000 from 1,863,250 to 1,861,250.
Here is a closer look at the series since 2007, with a callout to the past 12 months. The four-week moving average, which gives a clearer sense of the overall trend, is currently at 230,000. This is a decrease of 1,750 from the previous week's figure and marks the lowest level in more than two months.
For an even shorter timeline, the chart below shows initial unemployment claims starting in 2022.
As we can see, there's a good bit of volatility in this indicator, which is why the four-week moving average is a more useful number than the weekly data. Here is the complete data series dating back to 1967.
Outside of the COVID spike, initial unemployment claims have never been greater than 700,000 for a given week. With that said, we've adjusted the y-axis on the chart below so that we can get a zoomed in view of the series where the COVID spike isn't as prominent.
Notice the relationship between recessions and the rise in weekly unemployment claims. To no surprise, the 4-week moving average begins to rise at or before the start of a recession and reaches a relative peak at the end of a recession.
The headline unemployment insurance data is seasonally adjusted, as are the charts above. What does the non-seasonally adjusted data look like? See the chart below, which clearly shows the extreme volatility of the non-adjusted data (the green dots). The four-week MA gives an indication of the recurring pattern of seasonal change (note, for example, those regular January spikes).
Again, in this next chart we've adjusted the y-axis to get a zoomed in view of the series where the COVID spike isn't as prominent.
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 (red line), which we are currently below.
