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Weekly Unemployment Claims: Up 49K From Last Week, Much Worse Than Forecast

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by: Doug Short
Summary

The latest seasonally adjusted 252K new claims were up 49K from the previous week's unrevised figure.

This was much worse than the Investing.com forecast of 213K.

The 4-week moving average was 224,000, an increase of 6,250 from the previous week's unrevised average of 217,750.

By Jill Mislinski

Here is the opening statement from the Department of Labor:

In the week ending December 7, the advance figure for seasonally adjusted initial claims was 252,000, an increase of 49,000 from the previous week's unrevised level of 203,000. This is the highest level for initial claims since September 30, 2017 when it was 257,000. The 4-week moving average was 224,000, an increase of 6,250 from the previous week's unrevised average of 217,750. [See full report]

Thursday morning's seasonally adjusted 252K new claims, up 49K from the previous week's unrevised figure, was much worse than the Investing.com forecast of 213K.

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

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.

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 the 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).

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, near the end of the Great Recession.

Yearly Overlay

For an analysis of unemployment claims as a percent of the labor force, see the regularly updated piece "The Civilian Labor Force, Unemployment Claims and the Business Cycle". Here is a snapshot from that analysis.

Initial Claims to the CLF

Original Post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.