The Department of Labor's Unemployment Insurance Weekly Claims Report was released this morning for last week. The double-digit headline claim of a 10,000 reduction, however, was made possible by a 4,000 upward revision of the previous week's advance number. Here is the official statement from the Department of Labor:
In the week ending April 2, the advance figure for seasonally adjusted initial claims was 382,000, a decrease of 10,000 from the previous week's revised figure of 392,000. The 4-week moving average was 389,500, a decrease of 5,750 from the previous week's revised average of 395,250.
The advance seasonally adjusted insured unemployment rate was 3.0 percent for the week ending March 26, unchanged from the prior week's unrevised rate of 3.0 percent.
The advance number for seasonally adjusted insured unemployment during the week ending March 26 was 3,723,000, a decrease of 9,000 from the preceding week's revised level of 3,732,000. The 4-week moving average was 3,745,750, a decrease of 24,000 from the preceding week's revised average of 3,769,750.
Today's number was slightly below the Briefing.com consensus estimate of 386,000 claims. (Briefing.com's own estimate was for a higher 400,000).
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.
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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).
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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.
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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.
