New Jobless Claims At 348K: Substantially Higher Than Expected

The Unemployment Insurance Weekly Claims Reportwas released this morning for last week. The 348,000 new claims number was an increase of 14,000 from the previous week’s 334,000 (revised from 336,000). The less volatile and closely watched four-week moving average, which is usually a better indicator of the trend, was unchanged at 338,250.

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

In the week ending February 22, the advance figure for seasonally adjusted initial claimswas 348,000, an increase of 14,000 from the previous week’s revised figure of 334,000. The 4-week moving average was 338,250, unchanged from the previous week’s revised average. 

The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending February 15, unchanged from the prior week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending February 15 was 2,964,000, an increase of 8,000 from the preceding week’s revised level of 2,956,000. The 4-week moving average was 2,954,750, an increase of 4,000 from the preceding week’s revised average of 2,950,750.

Today’s seasonally adjusted number at 348K came in substantially above the Investing.com forecast of 335K.

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).