29 March 2014 Unemployment Claims 4 Week Average Statistically Unchanged

Blue Line 4 Week Average

The market was expecting the weekly intial unemployment claims at 315,000 to 335,000 (consensus 320,000) vs the 326,000 reported. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average improved rather significantly, moving from 319,250 (reported last week as 317,750) to 319,500.

It should be pointed out that Econintersect watches the year-over-year change on the 4 week moving average. There is some seasonality which seems to have migrated into the seasonally adjusted data, and year-over-year comparisons removes this seasonality. The four week rolling average of initial claims are 10.0% lower (much better than the 7.5% reported last week) than they were in this same week in 2013 (see chart below).

2014 claim levels are now within the normal range (around 350,000 weekly initial unemployment claims) of levels seen historically during times of economic expansion (see chart below).

From the Department of Labor:

In the week ending March 29, the advance figure for seasonally adjusted initial claims was 326,000, an increase of 16,000 from the previous week’s revised figure of 310,000. The 4-week moving average was 319,500, an increase of 250 from the previous week’s revised average of 319,250.

The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending March 22, an increase of 0.1 percentage point from the prior week’s revised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 22 was 2,836,000, an increase of 22,000 from the preceding week’s revised level of 2,814,000. The 4-week moving average was 2,842,250, a decrease of 13,500 from the preceding week’s revised average of 2,855,750.

Weekly Initial Unemployment Claims – 4 Week Average – Seasonally Adjusted – 2011 (red line), 2012 (green line), 2013 (blue line), 2014 (orange line)

Steven Hansen