Weekly Unemployment Claims: Down 8K from Last Week, Better Than Forecast

by Jill Mislinski

Here is the opening statement from the Department of Labor:

In the week ending September 17, the advance figure for seasonally adjusted initial claims was 252,000, a decrease of 8,000 from the previous week's unrevised level of 260,000. The 4-week moving average was 258,500, a decrease of 2,250 from the previous week's unrevised average of 260,750.

There were no special factors impacting this week's initial claims. This marks 81 consecutive weeks of initial claims below 300,000, the longest streak since 1970. [See full report]

Today's seasonally adjusted 252K new claims, down 8K from last week's number, was below theInvesting.com forecast of 262K.

The BLS calls attention to the 81-month streak below 300K. However, the latest weekly number is 4,000 above its interim low set 22 weeks ago on April 16th. The four-week moving average is at 258,500, which is 2,500 above the post-recession low set on April 23rd.

Here is a close look at the data over the past few years (with a callout for the past year), which gives a clearer sense of the overall trend in relation to the last recession and the volatility in recent months.

Unemployment Claims since 2007

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. This is the 81st consecutive week under 300K, the longest streak since 1970.

Unemployment Claims

The headline Unemployment Insurance data is seasonally adjusted. What does the non-seasonally adjusted data look like? See the chart below, which clearly shows 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).

Nonseasonally Adjusted Claims

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. We can see that this metric continues to fall below the long-term trend stretching back to 1968.

Nonseasonally Adjusted 52-week MA

Annual Comparisons

Here is a calendar-year overlay since 2009 using the 4-week moving average. The purpose is to compare the annual slopes since the peak in the spring of 2009.

For an analysis of unemployment claims as a percent of the labor force, see our recent commentary What Do Weekly Unemployment Claims Tell us About Recession Risk? Here is a snapshot from that analysis.

Initial Claims to the CLF