Initial jobless claims came in an 554,000: just around the consensus estimate. Back on July 9, I mentioned that seasonal adjustment factors would distort this number for a few weeks. Starting with next weeks report, the number will jump dramatically higher. In fact, if next week's factor was applied to this week's report, the number would have been 669,000 !!!!!
The same can be said for the continuing claims number, although to a lesser extent. I have also noted in past posts that this number becomes tougher to interpret because we don't know why this number is falling; new jobs or expiration of benefits?
In summary:
UNEMPLOYMENT INSURANCE DATA FOR REGULAR STATE PROGRAMS
| Advance |
|
|
| Prior1 |
|---|---|---|---|---|---|
WEEK ENDING | July 18 | July 11 | Change | July 4 | Year |
Initial Claims (SA) | 554,000 | 524,000 | +30,000 | 569,000 | 413,000 |
|---|---|---|---|---|---|
Initial Claims (NSA) | 580,944 | 671,242 | -90,298 | 581,145 | 411,408 |
4-Wk Moving Average (SA) | 566,000 | 585,000 | -19,000 | 607,000 | 393,000 |
| Advance |
|
|
| Prior1 |
|---|---|---|---|---|---|
WEEK ENDING | July 11 | July 4 | Change | June 27 | Year |
Ins. Unemployment (SA) | 6,225,000 | 6,313,000 | -88,000 | 6,904,000 | 3,165,000 |
|---|---|---|---|---|---|
Ins. Unemployment (NSA) | 6,231,108 | 6,173,940 | +57,168 | 6,061,619 | 3,164,970 |
4-Wk Moving Average (SA) | 6,541,500 | 6,674,000 | -132,500 | 6,774,250 | 3,176,000 |
Ins. Unemployment Rate (SA)2 | 4.7% | 4.7% | 0.0 | 5.2% | 2.4% |
|---|---|---|---|---|---|
Ins. Unemployment Rate (NSA)2 | 4.7% | 4.6% | +0.1 | 4.5% | 2.4% |
2 comments:
Sorry posted the comment in the wrong area....
I am too naive to understand how seasonality plays here. Do people hire more in Summer... Or do jobless people claim less because it is summer ?
The Department of Labor (as with the other data collection agencies) tries to "smooth" their reports. In theory, this enables economists to compare and interpret periodic data in a meaningful fashion. At various times of the year, certain activities accelerate or decelerate based on seasonal patterns. In this case, the DOL attempts to mute the typical furlough activity of auto manufacturers. Another example would be the warm weather months and housing activity: people buy homes while their kids are off of school & builders are more active in the spring.
During July, the DOL discounts the amount of jobless claims because they are not perceived to be indicative of an economic slowdown. The factor will change by a large amount for the next report, probably pushing the number above 650,000.
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