Jobless claims data tell a mixed story
U.S. Jobless claims are out again and the data are mixed. The past week saw a drop in seasonally-adjusted claims from 530,000 to 509,000. Meanwhile, continuing claims rose on a seasonally-adjusted basis from 3,962,000 to 4,087,000. While the data are mixed, we should still expect a large job loss when the unemployment number is released at 8:30AM ET tomorrow. Many are expecting upwards of 300,000 job losses and an unemployment rate of 6.8% or higher.
This week, my chart focuses on the difference between the seasonally-adjusted data (SA claims) and the raw data (NSA claims). While I have used the SA claims data in the past, there is a divergence this past week that I should point out because the holiday season is a period when seasonal adjustments have a large impact.
Looking at jobless claims first, The SA claims data dropped by a substantial amount — 21k. But the 4-week average still crept up to 524,500 as did the year-over-year comparisons (This is because this week’s 509,000 figure compares unfavorably to 484,000 4 weeks ago). When you look at the NSA claims data, new claims drop nearly 80,000 and year-over-year comparisons drop by 20,000 as well. So what does that all mean? Not a lot, frankly. The trend is unclear at this time. That said, we have firmly established 500,000 as a new plateau.
Going over to the continuing claims data, one sees a bump in SA claims across the board, this week’s number is higher, the 4-week average is higher and year-over-year comparisons are also higher. When one looks at NSA claims data, the picture is reversed for the raw number of workers filing continuing claims for and year-over-year comparisons. Again, the trend is unclear.
On the whole, this is the best report one could expect. However, it should not diminish from recognizing how difficult the job market is at present. I’ll leave you with the charts comparing seasonally-adjusted data to non-seasonally adjusted data. As you will see below, the NSA claims data is all over the map. That is why the seasonal adjustments exist. However, we should not forget that those adjustments can sometimes create distortions that reinforce the need to survey all the available information before making a judgment as to where things are headed.
Read John Crudele’s column in the NY Post linked below to understand why this is so.
It’s Time to End Monthly Employment Report Fraud – John Crudele, NY Post
ETA Press Release: Unemployment Insurance Weekly Claims Report – U.S. Department of Labor