Weekly Unemployment Claims: Down 8K, Beats Forecast

Here is the opening statement from the Department of Labor:

SEASONALLY ADJUSTED DATA

In the week ending December 25, the advance figure for seasonally adjusted initial claims was 198,000, a decrease of 8,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 205,000 to 206,000. The 4 week moving average was 199,250, a decrease of 7,250 from the previous week's revised average. This is the lowest level for this average since October 25, 1969 when it was 199,250. The previous week's average was revised up by 250 from 206,250 to 206,500. The advance seasonally adjusted insured unemployment rate was 1.3 percent for the week ending December 18, a decrease of 0.1 percentage point from the previous week's unrevised rate.

The advance number for seasonally adjusted insured unemployment during the week endi ng December 18 was 1,716,000, a decrease of 140,000 from the previous week's revised level. This is the lowest level for insured unemployment since March 7, 2020 when it was 1,715,000. The previous week's level was revised down by 3,000 from 1,859,000 to 1 ,856,000. The 4week moving average was 1,859,500, a decrease of 59,500 from the previous week's revised average. This is the lowest level for this average since March 14, 2020 when it was 1,730,750. The previous week's average was revised down by 750 from 1,919,000. [See full report]

This morning's seasonally adjusted 198K new claims, down 8K from the previous week's revised figure, was below the Investing.com forecast of 208K.

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.

Here's a copy of the above chart, but zoomed in, so the COVID spike isn't as prominent. We'll be adding a few more of these "zoomed in" looks in the coming weeks.

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.