Weekly Unemployment Claims: 840K New Claims Last Week

Here is the opening statement from the Department of Labor:

TECHNICAL NOTE:In response to recommendations resulting from an internal review of state operations, the state of California has announced a two week pause in its processing of initial claims for unemployment insurance benefits. The state will use this time to reduce its claims processing backlog and implement fraud prevention technology. Recognizing that the pause will likely result in significant week to week swings in initial claims for California and the nation unrelated to any changes in economic conditions, California’s initial claims published in the UI Claims News Release will reflect the level reported during the last week prior to the pause. Upon completion of the pause and the post-pause processing, the state will submit revised reports to reflect claims in the week during which they were filed. For additional information on California’s efforts: https://www.edd.ca.gov/About_EDD/pdf/news-20-49.pdf.

SEASONALLY ADJUSTED DATA

In the week ending October 3, the advance figure for seasonally adjusted initial claims was 840,000, a decrease of 9,000 from the previous week's revised level. The previous week's level was revised up by 12,000 from 837,000 to 849,000. The 4-week moving average was 857,000, a decrease of 13,250 from the previous week's revised average. The previous week's average was revised up by 3,000 from 867,250 to 870,250.

The advance seasonally adjusted insured unemployment rate was 7.5 percent for the week ending September 26, a decrease of 0.7 percentage point from the previous week's revised rate. The previous week's rate was revised up by 0.1 from 8.1 to 8.2 percent. The advance number for seasonally adjusted insured unemployment during the week ending September 26 was 10,976,000, a decrease of 1,003,000 from the previous week's revised level. The previous week's level was revised up 212,000 from 11,767,000 to 11,979,000. The 4-week moving average was 12,112,250, a decrease of 642,000 from the previous week's revised average. The previous week's average was revised up by 53,000 from 12,701,250 to 12,754,250. [See full report]

This morning's seasonally adjusted 840K new claims, down 9K from the previous week's revised figure, was worse than the Investing.com forecast of 820K.

Here is a close look at the data over the decade (with a callout for the past year), which gives a clearer sense of the overall trend.

As we can see, there's a good bit of volatility in this indicator, which is why the 4-week moving average (the highlighted number) is a more useful number than the weekly data. Here is the complete data series.

The headline Unemployment Insurance data is seasonally adjusted. What does the non-seasonally adjusted data look like? See the chart below, which clearly shows the extreme volatility of the non-adjusted data (the red dots). The 4-week MA gives an indication of the recurring pattern of seasonal change (note, for example, those regular January spikes).

Because of the extreme volatility of the non-adjusted weekly data, we can add a 52-week moving average to give a better sense of the secular trends. The chart below also has a linear regression through the data.

Here's a look at each year's claims going back to 2009.

For an analysis of unemployment claims as a percent of the labor force, see this regularly updated piece The Civilian Labor Force, Unemployment Claims and the Business Cycle. Here is a snapshot from that analysis.