US Jobless claims decline in latest week
The US Department of Labor released the employment last data point before tomorrow’s widely anticipated unemployment number comes out. The data showed jobless claims declining to 550,000 from 588,000 on a seasonally-adjusted basis. This puts the 4-week average at 555,250, the lowest average number since January. Meanwhile seasonally-adjusted continuing claims ticked up a notch to 6.3 million.
On the whole, the data do not represent any meaningful change in direction. Initial jobless claims are decreasing slowly from peak levels this past Winter but are no where close to a level that suggests the economy is adding jobs. This means that the unemployment will continue to rise for the foreseeable future.
I should note that the unadjusted data last week were very low, with initial claims at 463K and continuing claims at just under 6 million, both multi-month lows. The seasonal factors now at 84.2, will reach a low of 74.8 in early September, meaning the unadjusted data will continue to fall due to seasonality of hiring patterns (the reported number multiplies the unadjusted number by the seasonal factor and divides by 100).
Because claims are now falling with the business cycle, it makes the seasonal adjustments somewhat more distortionary to the underlying data. After Labor day, when the seasonal pattern begins to reverse and is working at odds with the business cycle trend, the underlying business cycle trend will be more clear.
Source
Unemployment Insurance Weekly Claims Report – Department of Labor
Any comment on the 140,000 persons who were counted in “continuing claims” last week, but were not this week because they exhausted their state-level benefits,and moved to “Extended Benefits” ???
Extended Benefits 491,684 352,393 +139,291 1,471
Perhaps I am missing important statistical insights that minimize the importance of this number.
Scott, no, the move to and the loss of extended benefits is significant. You’re right on the money.
It doesn’t have any historical data to compare it to, so I tend to leave it out. It also makes the continuing claims number less meaningful. So I have been to concentrate on initial claims.