U.S. jobless claims: slight uptick to 588,000
Seasonal adjustments for jobless claims are wearing off, but the uptick in claims remains. U.S. Jobless claims for the week ended January 24th came in at 588,000, up slightly from the previous week. Meanwhile, continuing claims reached a new high of nearly 4.8 million. The data only confirms how weak the U.S. jobs picture is and sets us up for a very big unemployment number on Friday.
I want to concentrate the charts this week on the divergence beween seasonally-adjusted claims data and the real data. As you know, I use year-on-year data comparisons to analyze the jobless claims numbers. And right now, those comparisons are showing an enormous divergence between seasonally-adjusted data and the raw data of 100,000 for initial claims and 400,000 for continuing claims. Translation: the number you hear reported in the media is under-representing the severity of job losses.
Take a look at the chart below.
Now, what you are looking at is a chart of the entire data series back to 1967 showing the year-on-year change in the 4-week average jobless claims. Basically, it shows a smoothed version of how much better or how much worse the jobs picture has got in one year’s time.
But, what you should notice is that there have been four times in the last 42 years when the seasonally-adjusted data was really not keeping pace with the real data. The first time was in 1974 after the oil shock. The second was in the recovery from the 1973-75 recession. The third time was in 1992 after the jobless recovery that cost George Bush the White House. The last time is now.
I interpret this data to mean that job losses will be much greater going forward than is suggested by the jobless claims numbers. The first signpost will be tomorrow next Friday when the unemployment report for December January is released. Let’s see what we get.
Unemployment Insurance Weekly Claims Report – U.S. Department of Labor