Weekly Unemployment Claims: Down 12K, Beats Forecast

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By Jill Mislinski

Here is the opening statement from the Department of Labor:

In the week ending October 15, the advance figure for seasonally adjusted initial claims was 214,000, a decrease of 12,000 from the previous week’s revised level. The previous week’s level was revised down by 2,000 from 228,000 to 226,000. The 4 week moving average was 212,250, an increase of 1,250 from the previous week’s revised average. The previous week’s average was revised down by 500 from 211,500 to 211,000.

The advance seasonally adjusted insured unemployment rate was 1.0 percent for the week ending October 8, an increase of 0.1 percentage point from the previous week’s revised rate. The previous week’s rate was revised down by 0.1 from 1. to 0.9 percent. The advance number for seasonally adjusted insured unemployment October during the week ending 8 was 1,385,000, an increase of 21,000 from the previous week’s revised level. The previous week’s level was revised down by 4,000 from 1,368,000 to 1,364,000. The 4 week moving average was 1,365,000, an increase of 2,250 from the previous week’s revised a 1,362,750.

Thursday morning’s seasonally adjusted 214K new claims, down 12k from the previous week’s revised figure, was better than the Investing.com forecast of 230K.

Here is a close look at the data over the decade (with a callout for the past year), which gives a clearer sense of the overall trend.

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

Here’s a copy of the above chart, but zoomed in, so the COVID spike isn’t as prominent.

Unemployment insurance

The headline Unemployment Insurance data is seasonally adjusted. 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 red dots). The 4-week MA gives an indication of the recurring pattern of seasonal change (note, for example, those regular January spikes).

Unemployment insurance

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.

Nonseasonally Adjusted 52-week MA

Here’s a look at a sample of year’s claims going back to 2009.

Weekly unemployment claims yearly comparisons

For an analysis of unemployment claims as a percent of the labor force, see this regularly updated piece The Civilian Labor Force, Unemployment Claims and the Business Cycle. Here is a snapshot from that analysis.

Initial Claims to the CLF

Original Post

Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.

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