Initial Unemployment Claims: 335K SA; NSA Layoffs up by Almost 6% Year Over Year; YOY Seasonal Adjustment Factors Wildly Differ (UPDATE: First Truly Comparable YOY Increase Since Oct. 2009)
Cliff’s notes: Seasonally adjusted claims, if calculated consistently with the same week last year, would be 50,000 higher than the 335,000 being reported.
Bloomberg’s prediction is 368,000 initial claims.
AP: “Stock futures are edging higher ahead of new data expected to show that hiring and home building continue to ramp up in the U.S.”
Well, here we go — From the Department of Labor:
SEASONALLY ADJUSTED DATA
In the week ending January 12, the advance figure for seasonally adjusted initial claims was 335,000, a decrease of 37,000 from the previous week’s revised figure of 372,000. The 4-week moving average was 359,250, a decrease of 6,750 from the previous week’s revised average of 366,000.
… UNADJUSTED DATA
The advance number of actual initial claims under state programs, unadjusted, totaled 555,708 in the week ending January 12, an increase of 2,360 from the previous week. There were 525,422 initial claims in the comparable week in 2012.
This is horse manure, as seen in DOL’s own summary:
Raw claims (green boxes) were 5.8% higher than the same week last year — both weeks had five business days, representing the first such week in each respective year — yet seasonally adjusted claims (red boxes) are 8% lower.
This occurred the because the seasonal adjustment factor used this past week (166.0) is much higher than the the one used during the same week last year (144.2).
If last year’s factor had been used on this year’s raw number, seasonally adjusted claims would have come in at 385,000 (555,708 divided by 1.442, rounded).
Today’s report does NOT show that “hiring is ramping up.” It shows, for the first time in what may be years, at least during a week clearly comparable to the prior year, that year-over year layoffs are on the rise.
UPDATE, Jan. 21: Finally had a chance to look at prior year figures in detail. The three most previous instances where year-over-year raw claims increased were as follows:
- 11/10/12 vs. 11/12/11 — Claims were 116K higher, but that can be charged off to 2012 Superstorm Sandy.
- 4/30/11 vs. 5/1/10 — Claims were 16K higher, and would have been influence by Easter taking place on 4/24/11 (i.e., claims that couldn’t be filed on Good Friday carried into the early days after Easter; Easter 2010 was much earlier).
- 10/31/09 vs. 11/1/08 — Claims were 21K higher. This was the end of a long string of such weeks due the recession and lack of anything resembling an initial recovery in the fall of 2009. This is the last truly comparable week when current year claims exceeded the comparable full business week in the prior year.
So it’s been over three years (actually 167 weeks) since we’ve seen a real increase in weekly raw claims over a truly comparable week in the previous year.