January 24, 2013

Initial Unemployment Claims (012513): 330K SA, But Raw Claims (437K) Top Previous Year (417K) For Second Week in a Row

Filed under: Economy,Taxes & Government — Tom @ 8:59 am

From the Department of Labor:

SEASONALLY ADJUSTED DATA

In the week ending January 19, the advance figure for seasonally adjusted initial claims was 330,000, a decrease of 5,000 from the previous week’s unrevised figure of 335,000. The 4-week moving average was 351,750, a decrease of 8,250 from the previous week’s revised average of 360,000.

… UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 436,766 in the week ending January 19, a decrease of 119,944 from the previous week. There were 416,880 initial claims in the comparable week in 2012.

For the second week in a row (last week seen here), raw claims (not seasonally adjusted — NSA; green boxes) were higher than the same week a year ago, this time by almost 5%. But year-to-year differences between the seasonal adjustment factors caused seasonally adjusted claims (SA; red boxes) to come in 11% lower:

UnempClaims011913

Raw claims have not topped the analogous week from the previous year for two weeks in a row since October 2009.

If last year’s seasonal adjustment factor of 112.0 had been used on this year’s raw number instead of the 132.3 that DOL actually used, seasonally adjusted claims would have come in at 393,000 (436,766 divided by 1.12, rounded).

The Martin Luther King holiday was on January 16 last year, while the most recent week didn’t contain the King holiday. That explains some of the difference between the two years’ seasonal factors, but by no means all.

Given that next week’s report will show a flipped situation with the holiday (MLK Day in this year’s numbers but not in last year), there had better be a big year-over-year dropoff in raw claims. If not, it’s going to pretty convincing evidence that the job market has returned to sputtering mode.

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4 Comments

  1. Regarding the MLK effect, next week’s seasoning factor is slated to be 99.5, while the equivalent week from last year’s seasoning factor was 110.7. Something tells me there will be a double gut-punch this time next week.

    Comment by steveegg — January 24, 2013 @ 9:16 am

  2. Wow. So next week’s SA claims will actually be slightly higher than the raw number.

    Last year’s raw number was 422K. Even if the raw number is 15% lower, which seems a stretch, SA will still be 360K — and even that’s a pretty big jump.

    UPDATE: A quickie review of what happened around Columbus Day 2012 in the context of today’s news would seem to indicate a YOY raw drop-off of about 5% next week, and 10% at most. We’ll see.

    Comment by Tom — January 24, 2013 @ 9:24 am

  3. Related news:

    http://www.bloomberg.com/news/2013-01-24/jobless-claims-in-u-s-decrease-prolonging-seasonal-swings.html

    The swings in claims may reflect challenges adjusting the data during the holiday period and at the start of quarters. This year’s changes are following patterns seen in prior years, a Labor Department spokesman said as the data were released to the press. In 2008, claims dropped for consecutive weeks in early January and then rebounded at the end of the month.

    The number of applications was estimated for California, Virginia and Hawaii because of the holiday-shortened week, the Labor Department spokesman also said.

    But the more important issue is being fudged:

    The number of people who continue to collect jobless benefits fell by 71,000 to 3.16 million in the week ended Jan. 12, the fewest since July 2008. The continuing claims figure does not include workers receiving extended benefits from the federal government.

    Extended Benefits

    Those who’ve exhausted their traditional benefits and now are collecting emergency and extended payments decreased by 365,600 to 1.69 million in the week ended Jan. 5. These figures may also be distorted because of the holidays, the Labor Department spokesman said.

    Since those people who are now not getting those extended benefits, what happened to them? Did they get one of those 153,000 jobs created per month? NO, they ended up on another less reported statistic that doesn’t support the narrative. Unemployment has only fallen as a statistical fluke but real world jobless rates are up.

    As of December 2012: http://www.bls.gov/webapps/legacy/cpsatab1.htm

    Not in Labor Force (people wanting a job) now at 6.558 million versus 4.983 million in 12/08

    Not in Labor Force now at 88.3 million versus 79.5 million in 12/08

    Employed at 142.4 million still down from Dec 2008 of 145.3 million

    The economy is doing just swimmingly! Those being COUNTED as unemployed are finally leaving the rolls. Good riddance to them, we’re tired of counting them. /sarcasm/

    Comment by dscott — January 24, 2013 @ 11:49 am

  4. Viewing the other side of the mirror, employment:

    Kansas Fed Joins NY, Philly And Richmond Fed In Contracting; Employment Index Drops To 2009 Levels

    http://www.zerohedge.com/news/2013-01-24/kansas-fed-joins-ny-philly-and-richmond-fed-contracting-employment-index-drops-2009-

    One nasty looking chart.

    Comment by dscott — January 24, 2013 @ 1:12 pm

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