April 4, 2013

Initial Unemployment Claims (040413); 385K SA, Way Above Expectations; Year-Over-Year NSA Claims Virtually Unchanged

Filed under: Economy,Taxes & Government — Tom @ 8:00 am

Predictions:

  • Bloomberg: 353,000 (also predicting 195,000 jobs added in tomorrow’s employment report)
  • Reuters:  no prediction as of very early morning (“Investors will keep a close eye on U.S. weekly jobless claims, due at 1230 GMT on Thursday, for further insight on Friday’s all-important monthly U.S. jobs data.” UPDATE: After the report’s release, Reuters says expectations were 350,000.

Seasonal adjustment factors:
- Week ended March 30, 2013 — 81.6
- Week ended March 31, 2012 — 85.8

This is a big enough difference to matter. Last year’s raw claims were 315,714, leading to a seasonally adjusted result (after revisions of seasonal factors announced last week) of 368,000 (315,714 divided by .858).

Even if this year’s raw claims come in at 303,000, which would be 4% lower than a year ago (last week’s year-over-year differential was only 2.4%) and also about 4% lower than last week’s 315,657, the seasonally adjusted result will be 371,000 (303,000 divided by .816), well above the Bloomberg-reported prediction. Raw claims of 327,000 would push the seasonally adjusted result over 400,000.

Though the presence of Good Friday may affect how many raw claims roll in, I hope I’m wrong, but I think there’s a pretty strong chance of an “unexpectedly” unpleasant “surprise” today.

The report will be here at 8:30.

HERE IT IS: Told ya (permanent link) —

In the week ending March 30, the advance figure for seasonally adjusted initial claims was 385,000, an increase of 28,000 from the previous week’s unrevised figure of 357,000. The 4-week moving average was 354,250, an increase of 11,250 from the previous week’s unrevised average of 343,000.

… UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 314,016 in the week ending March 30, a decrease of 1,596 from the previous week. There were 315,714 initial claims in the comparable week in 2012.

For the first time in quite a while and maybe the fifth time in two years, the previous week wasn’t revised. If last year’s seasonal adjustment factor had been used on this year’s raw number, seasonally adjusted claims would have come in at 366,000 (314,016 divided by .858, rounded). But given that last week contained Good Friday, we should have expected fewer raw claims and didn’t get them.

It’s really not very satisfying to be right on this, because any child should have been able to do the analysis above and raise the same warning as I did before the release. I don’t understand why these “experts” either can’t or won’t do the same thing.

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UPDATE: Zero Hedge — “excluding the Sandy aberrations, this was the biggest two week surge in claims since April 2011.”

Spring slump III (or is it IV?) appears to be arriving on schedule.

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5 Comments

  1. I think we had this discussion last year. I’m seeing this as evidence there’s going to be a 2-week Easter Effect on jobless claims that, as always, isn’t adjusted by the usual seasoning.

    Of course, if next week’s claims come in above 400K, or if the following week’s claims come in above 370K (both possibilities), it’s going to get ugly real quick.

    Comment by steveegg — April 4, 2013 @ 9:29 am

  2. Remains to be seen. But I believe the current week’s factor was lower because they expected a lot fewer claims due to Good Friday.

    I think the situation flips next week — nope, the two factors are about equal, but they’re both pretty high (103.3 vs. 102.4). You would think that this would presage a big SA drop next week for no other reason beyond the fact that the factors are detached from reality.

    Last year’s raw claims of 390K SA’d to 378K SA. As rough as I think things are, I just don’t see a repeat of that raw number next week (that would be about a 25% rise from this week — yikes if that really happens), meaning there will be a big downward slide that the “experts,” who don’t even seem to try to analyze these things, won’t predict.

    Comment by Tom — April 4, 2013 @ 10:30 am

  3. Regarding the seasonal adjustment, I seem to recall 2013′s adjustment factor consistently running lower than 2012′s. That may have been “adjusted” last week when DOL readjusted the seasoning for the last several years.

    I doubt too many state agencies take off Good Friday anymore. I know Wisconsin’s Department of Health and Family Services stopped giving employees the half-day in the late 1980s (my dad was an auditor for them).

    Comment by steveegg — April 4, 2013 @ 12:33 pm

  4. [...] Econ catch-up: See Wednesday’s post containing a stream of “unexpectedly” unimpressive though still expansionary results. Plus: The unemployment claims situation has been deteriorating. [...]

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  5. [...] Ms. Lowrey somehow missed or chose to ignore Friday’s awful employment news and several other government and private reports issued early last week indicating that the alleged [...]

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