New Jobless Claims At 283K, Beats Expectations

Here is the opening statement from the Department of Labor:

In the week ending February 14, the advance figure for seasonally adjusted initial claims was 283,000, a decrease of 21,000 from the previous week’s unrevised level of 304,000. The 4-week moving average was 283,250, a decrease of 6,500 from the previous week’s unrevised average of 289,750. 

There were no special factors impacting this week’s initial claims. [See full report]

Today’s seasonally adjusted 283K came in below theInvesting.com forecast of 293K. The four-week moving average at 283,250 is now only 4,250 above its 14-year interim low set fifteen weeks ago.

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

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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.

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Occasionally I see articles critical of seasonal adjustment, especially when the non-adjusted number better suits the author’s bias. But a comparison of these two charts clearly shows extreme volatility of the non-adjusted data, and the 4-week MA gives an indication of the recurring pattern of seasonal change in the second chart (note, for example, those regular January spikes).

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Because of the extreme volatility of the non-adjusted weekly data, a 52-week moving average gives a better sense of the secular trends. I’ve added a linear regression through the data. We can see that this metric continues to fall below the long-term trend stretching back to 1968.

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A Four-Year Comparison

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. The latest data point is off its post recession low set fifteen weeks ago.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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