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Friday, March 29, 2024

Weekly Unemployment Claims: Down by 14,000

Courtesy of Doug Short.

The Unemployment Insurance Weekly Claims Report was released this morning for last week. The 351,000 new claims is decrease of 14,000 from an upward adjustment of 3,000 for the previous week. The less volatile and closely watched four-week moving average came in unchanged at 355,000, the 18th week below 400K after 30 consecutive weeks above that benchmark. Here is the official statement from the Department of Labor:

In the week ending March 10, the advance figure for seasonally adjusted initial claims was 351,000, a decrease of 14,000 from the previous week’s revised figure of 365,000. The 4-week moving average was 355,750, unchanged from the previous week’s revised average of 355,750.

The advance seasonally adjusted insured unemployment rate was 2.6 percent for the week ending March 3, a decrease of 0.1 percentage point from the prior week’s unrevised rate of 2.7 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Mach 3, was 3,343,000, a decrease of 81,000 from the preceding week’s revised level of 3,424,000. The 4-week moving average was 3,394,250, a decrease of 25,250 from the preceding week’s revised average of 3,419,500.

Today’s seasonally adjusted number came in below the Briefing.com consensus estimate of 355K and Briefing.com’s own estimate of 360K.

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. This metric has now fallen below 400,000 for the first time since late November 2008. I’ve now added a linear regression through the data. We can see that this metric has started to slip below the long-term trend stretching back to 1968.

 

 

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.

 

 

 

 

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