Courtesy of Doug Short.
The Unemployment Insurance Weekly Claims Report was released this morning for last week. Today’s 414,000 keeps us above the 400K level, where it has been for 21 of the last 22 weeks. The less volatile and closely watched four-week moving average is now at 20 consecutive weeks above 400K and has been rising for the past three weeks. Here is the official statement from the Department of Labor:
In the week ending September 3, the advance figure for seasonally adjusted initial claims was 414,000, an increase of 2,000 from the previous week’s revised figure of 412,000. The 4-week moving average was 414,750, an increase of 3,750 from the previous week’s revised average of 411,000.
The advance seasonally adjusted insured unemployment rate was 3.0 percent for the week ending August 27, unchanged from the prior week’s unrevised rate of 3.0 percent.
The advance number for seasonally adjusted insured unemployment during the week ending August 27 was 3,717,000, a decrease of 30,000 from the preceding week’s revised level of 3,747,000. The 4-week moving average was 3,734,500, an increase of 5,500 from the preceding week’s revised average of 3,729,000.
Today’s seasonally adjusted number was worse than (above) the Briefing.com consensus estimate of 400K.
As we can see, there’s a good bit of volatility in this indicator, which is why the 4-week moving average (shown in the callouts) is a more useful number than the weekly data.
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).
Because of the extreme volatility of the non-adjusted weekly data, a 52-week moving average gives a better sense of the long-term trends.
The Bureau of Labor Statistics provides an overview on seasonal adjustment here (scroll down about half way down). For more specific insight into the adjustment method, check out the BLS Seasonal Adjustment Files and Documentation.
For a broader view of unemployment, see the latest update in my monthly series Unemployment and the Market Since 1948.
