October 2020 Initial Unemployment Claims Improve

Market expectations for weekly initial unemployment claims (from Econoday) were 750 K to 880 K (consensus 758 K), and the Department of Labor reported 751,000 new claims. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 812,250 (reported last week as 811,250) to 787,750

Analyst Opinion of Initial Unemployment Claims

Job's loss since the start of the pandemic is now 66,210,000. Many in this number are now employed or have dropped out of the workforce as all programs continuing claims number is 22,654,453

It should be pointed out that Econintersect watches the year-over-year change in the 4-week moving average. There is always some seasonality that migrates into the seasonally adjusted data, and year-over-year comparisons help remove some seasonality. The four-week rolling average of initial claims is 266 % higher than one year ago (versus the 277 % higher last week).

Claim levels before the coronavirus pandemic were at 40-year lows (with the normal range around 350,000 weekly initial unemployment claims of levels seen historically during times of economic expansion - see chart below).

States with the Biggest Increases in Unemployment Due to Coronavirus

From the Department of Labor:

In the week ending October 24, the advance figure for seasonally adjusted initial claims was 751,000, a decrease of 40,000 from the previous week's revised level. The previous week's level was revised up by 4,000 from 787,000 to 791,000. The 4-week moving average was 787,750, a decrease of 24,500 from the previous week's revised average. The previous week's average was revised up by 1,000 from 811,250 to 812,250.

The advance seasonally adjusted insured unemployment rate was 5.3 percent for the week ending October 17, a decrease of 0.5 percentage point from the previous week's revised rate. The previous week's rate was revised up by 0.1 from 5.7 to 5.8 percent. The advance number for seasonally adjusted insured unemployment during the week ending October 17 was 7,756,000, a decrease of 709,000 from the previous week's revised level. The previous week's level was revised up 92,000 from 8,373,000 to 8,465,000. The 4-week moving average was 9,053,250, a decrease of 1,055,750 from the previous week's revised average. The previous week's average was revised up by 23,250 from 10,085,750 to 10,109,000.

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