Upward Trend Confirmed In New Jobless Claims

On an unadjusted basis, new jobless claims declined by 101,498 to 873,966. Seasonally adjusted claims also declined by 67,000 to 847,000. The 4 week moving average, however, rose by 16,250 to 868,000. Since the 4-week average has risen above 850,000, and weekly claims were above 900,000 for several weeks in a row, jobless claims have finally met my criteria confirming a change to an upward trend.

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): 

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 - and because the holiday season even in ordinary years plays havoc with seasonal adjustments, I have been posting the YoY% change in the numbers as well, since they will be much less affected by scale.

Here’s what that looks like:

There is much less noise in the numbers, and while the change is more muted, the trend is now clearer. Both seasonally adjusted metrics are more than 300% higher YoY vs. 200-225% in November, while unadjusted claims are close to 300% vs. just over 200% higher YoY in early November.
The story remains different with continuing claims, which historically lag initial claims typically by a few weeks to several months. Seasonally adjusted continuing claims declined by 203,000 to 4,771,000, while the unadjusted number declined by 274,055 to 5,208,719, both yet another pandemic low:

Because of these lag initial claims, I have suspected that we would see an upward reversal, but obviously, that hasn’t happened yet.
As I usually note, a reminder that both initial and continued claims remain at or above their worst levels from the Great Recession.

Finally, because the past two weeks have been about 50,000 higher than the conquerable two weeks last month, it appears more likely than not that we will see another slightly negative jobs report for January when it is reported in two weeks.

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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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