New Jobless Claims A Disappointing 339K And Trending In The Wrong Direction

The Unemployment Insurance Weekly Claims Report was released this morning for last week. The 339,000 new claims number was a 2,000 decline from the previous week’s 341,000, an upward revision from 338,000. The less volatile and closely watched four-week moving average, which is usually a better indicator of the trend, rose by 8,500 to 357,250, which is only slightly below the 4-week moving average at the end of 2012.

Here is the opening of the official statement from the Department of Labor:

In the week ending December 28, the advance figure for seasonally adjusted initial claims was 339,000, a decrease of 2,000 from the previous week’s revised figure of 341,000. The 4-week moving average was 357,250, an increase of 8,500 from the previous week’s revised average of 348,750.

The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending December 21, unchanged from the prior week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 21 was 2,833,000, a decrease of 98,000 from the preceding week’s revised level of 2,931,000. The 4-week moving average was 2,857,750, an increase of 19,000 from the preceding week’s revised average of 2,838,750.

Today’s seasonally adjusted number came in above the Investing.com forecast of 334K.

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).