The Unemployment Insurance Weekly Claims Report was released this morning for last week. Claims dropped 1,000 from the previous week, but the 4-week moving average rose by 500. This marks the twelfth week above the 400K level after dropping below 400K for seven of the previous nine weeks. Here is the official statement from the Department of Labor:
In the week ending June 25, the advance figure for seasonally adjusted initial claims was 428,000, a decrease of 1,000 from the previous week's unrevised figure of 429,000. The 4-week moving average was 426,750, an increase of 500 from the previous week's unrevised average of 426,250.
The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending June 18, a decrease of 0.1 percentage point from the prior week's revised rate of 3.0 percent.
The advance number for seasonally adjusted insured unemployment during the week ending June 18 was 3,702,000, a decrease of 12,000 from the preceding week's revised level of 3,714,000. The 4-week moving average was 3,703,500, a decrease of 11,250 from the preceding week's revised average of 3,714,750.
Today's seasonally adjusted number, 428,000, was above both the Briefing.com consensus estimate of 420K and Briefing.com's own 420K expectation.
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.
Source: DShort
