Jobless Claims Continue To Show Sideways To Upward Trend

New jobless claims declined this week, but are still significantly above their recent pandemic lows, while continuing claims, seasonally adjusted, made a new pandemic low. The downward trend in claims has clearly ended for now, although whether the current trend is sideways or upward remains unclear. In particular, there is a sizable but by no means certain likelihood that December’s jobs number will be negative.

On an unadjusted basis, new jobless claims declined by 71,512 to 869,398. Seasonally adjusted claims also declined by 89,000 to 803,000. The 4-week moving average rose by 4,000 to 818,250. All of these are above their recent lows. 

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

(Click on image to enlarge)

Because of the huge distortions caused by the pandemic in seasonally adjusted numbers, and because we are at a time of year when seasonality causes the most distortions in any event, let’s also take a look at the YoY changes in all of the above metrics:

(Click on image to enlarge)

There is now a 6-week trend in the seasonally adjusted data of YoY% increases, while the trend looks sideways for the unadjusted data. It remains likely that the renewed explosion of the pandemic has indeed caused new jobless claims to break into an upward trend due to the rampaging pandemic. Nevertheless, as I have written for the past 2 weeks, I won’t feel certain unless and until seasonally adjusted new claims rise over 900,000 and the 4-week average over 850,000, which would take both out of the range they have been in over the past 4 months. We’re not quite there yet.

Seasonally adjusted continuing claims, which historically lag initial claims typically by a few weeks to several months, declined by 170,000 to a new pandemic low of 5,337,000. On an unadjusted basis, they declined by 5,552 to 5,444,281, about 200,000 above their recent pandemic low:

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