21 June 2014 Unemployment Claims 4 Week Average Marginally Worsens

Blue Line 4 Week Average

The market was expecting the weekly intial unemployment claims at 305,000 to 315,000 (consensus 310,000) vs the 312,000 reported. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 312,250 (reported last week as 311,750) to 314,250.

It should be pointed out that Econintersect watches the year-over-year change on the 4 week moving average. There is always some seasonality which migrates into the seasonally adjusted data, and year-over-year comparisons helps remove some seasonality. The four week rolling average of initial claims are 9.2% lower (worse than the 10.6% 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 June 21, the advance figure for seasonally adjusted initial claims was 312,000, a decrease of 2,000 from the previous week’s revised level. The previous week’s level was revised up by 2,000 from 312,000 to 314,000. The 4-week moving average was 314,250, an increase of 2,000 from the previous week’s revised average. The previous week’s average was revised up by 500 from 311,750 to 312,250. There were no special factors impacting this week’s initial claims.

The advance seasonally adjusted insured unemployment rate was 2.0 percent for the week ending June 14, an increase of 0.1 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 14 was 2,571,000, an increase of 12,000 from the previous week’s revised level. The previous week’s level was revised down by 2,000 from 2,561,000 to 2,559,000. The 4-week moving average was 2,587,000, a decrease of 13,000 from the previous week’s revised average. This is the lowest level for this average since November 3, 2007 when it was 2,585,750. The previous week’s average was revised down by 500 from 2,600,500 to 2,600,000.

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

Steven Hansen