Weekly Unemployment Claims: Down 2K, Beats Forecast Again

By Jill Mislinski

Here is the opening statement from the Department of Labor:

In the week ending August 20, the advance figure for seasonally adjusted from the previous week’s revised level. The previous week’s level was initial claims was 243,000, a decrease of 2,000 revised down by 5,000 from 250,000 to 245,000. The 4-week moving average was 247,000, an increase of 1,500 from the previous week’s revised average. The previous week’s average was revised down by 1,250 from 246,750 to 245,500.

The advance seasonally adjusted insured unemployment rate was 1.0 percent for the week ending August 13, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 13 was 1,415,000, a decrease of 1 9,000 from the previous week’s revised level. The previous week’s level was revised down by 3,000 from 1,437,000 to 1,434,000. The 4-week moving average was 1,424,750, an increase of 12,500 from the previous week’s revised average. The previous week’s average was revised down by 750 from 1,413,000 to 1,412,250.

This morning’s seasonally adjusted 243K new claims, down 2k from the previous week’s revised figure, was slightly better than the Investing.com forecast of 245K.

Here is a close look at the data over the decade (with a callout for the past year), which gives a clearer sense of the overall trend. 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.

Here’s a copy of the above chart, but zoomed in, so the COVID spike isn’t as prominent.

The headline Unemployment Insurance data is seasonally adjusted. What does the non-seasonally adjusted data look like? See the chart below, which clearly shows the extreme volatility of the non-adjusted data (the red dots). The 4-week MA gives an indication of the recurring pattern of seasonal change (note, for example, those regular January spikes).

Because of the extreme volatility of the non-adjusted weekly data, we can add a 52-week moving average to give a better sense of the secular trends. The chart below also has a linear regression through the data.

Here’s a look at a sample of year’s claims going back to 2009.

For an analysis of unemployment claims as a percent of the labor force, see this regularly updated piece The Civilian Labor Force, Unemployment Claims and the Business Cycle. Here is a snapshot from that analysis.

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Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.