Initial Jobless Claims: It Appears That The Worst Of The Winter 2020-21 Increase Is Behind Us

Let me start off this week’s review of initial jobless claims by pre-debunking something I am sure is going to be said elsewhere: a lack of reporting in Texas did *not* appreciably skew this week’s numbers. Applying the same workaround I did for Hurricanes Sandy and Harvey, I.e., subtracting the affected State’s data from the unadjusted number, to see how much it is at variance with all the other States, shows that Texas’s underreporting due to its electricity crisis was less than 20,000 at worst in a week with little seasonal adjustment. In other words, being very generous, the “real” seasonally adjusted number of initial claims at worst probably would have been only about 30,000 higher - I.e., 760,000 - but for Texas issues.

Additionally, last week’s nationwide numbers were actually revised *down* by 20,000, unlike the two prior weeks which saw very large upward revisions.

With those two introductory remarks out of the way, let’s look at the data. 

This week, on an unadjusted basis, new jobless claims declined by 131,734 to 710,313. Seasonally adjusted claims decreased by 111,000 to 730,000. The 4-week moving average declined by 20,500 to 807,250. 

Here is the close up since the end of July (these numbers were in the range of 5 to 7 million at their worst in early April): 

The good news is that recent increases seem to have plateaued. Nevertheless, both adjusted and unadjusted claims remain above their worst levels at the depths of the Great Recession.

Because of the huge swings caused by the scale of the pandemic - typically claims only vary by 20,000 or less from week to week, but since the start of the pandemic, swings of 50,000 or 100,000 per week have happened as often as not, recently I began posting the YoY% change in the numbers as well since they will be much less affected by scale. As a result, there is less noise in the numbers, and the trend can be seen more clearly:

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Disclaimer: This blog contains opinions and observations. It is not professional advice in any way, shape or form and should not be construed that way. In other words, buyer beware.

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