13 September 2014 Unemployment Claims Rolling Averages Decline

Blue Line 4 Week Average

The market was expecting the weekly initial unemployment claims at 290,000 to 325,000 (consensus 305,000) vs the 280,000 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 304,250 (reported last week as 304,000) to 299,500.

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 5.0% lower (worse than the 5.5% 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 September 13, the advance figure for seasonally adjusted initial claims was 280,000, a decrease of 36,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 315,000 to 316,000. The 4-week moving average was 299,500, a decrease of 4,750 from the previous week’s revised average. The previous week’s average was revised up by 250 from 304,000 to 304,250. There were no special factors impacting this week’s initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending September 6, a decrease of 0.1 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 6 was 2,429,000, a decrease of 63,000 from the previous week’s revised level. This is the lowest level for insured unemployment since May 19, 2007 when it was 2,417,000. The previous week’s level was revised up 5,000 from 2,487,000 to 2,492,000. The 4-week moving average was 2,481,750, a decrease of 18,250 from the previous week’s revised average. This is the lowest level for this average since June 23, 2007 when it was 2,477,250. The previous week’s average was revised up by 1,250 from 2,498,750 to 2,500,000.

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

Steven Hansen