04 October 2014 Unemployment Claims Rolling Average Improvement Continues

Blue Line 4 Week Average

The market was expecting the weekly initial unemployment claims at 285,000 to 295,000 (consensus 293,000) vs the 287,000 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 295,000 (reported last week as 294,750) to 287,750.

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 11.4% lower (much better than the 3.4% 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 October 4, the advance figure for seasonally adjusted initial claims was 287,000, a decrease of 1,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 287,000 to 288,000. The 4-week moving average was 287,750, a decrease of 7,250 from the previous week’s revised average. This is the lowest level for this average since February 4, 2006 when it was 286,500. The previous week’s average was revised up by 250 from 294,750 to 295,000. 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 27, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 27 was 2,381,000, a decrease of 21,000 from the previous week’s revised level. This is the lowest level for insured unemployment since May 27, 2006 when it was 2,381,000. The previous week’s level was revised up 4,000 from 2,398,000 to 2,402,000. The 4-week moving average was 2,414,250, a decrease of 27,750 from the previous week’s revised average. This is the lowest level for this average since July 1, 2006 when it was 2,406,250. The previous week’s average was revised up by 750 from 2,441,250 to 2,442,000.

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

Steven Hansen