Initial Unemployment Claims (041014): 300K SA; Raw Claims Edge Up 1.3% From Previous Week, Which Was Itself Revised Up
Seasonal Adjustment Factors:
- Week ended April 5, 2014 — 99.3
- Week ended April 6, 2013 — 102.7
- Week ended March 29, 2014 — 294,862, revised up from 289,535 initially reported last week, leading to an upward revision to 332,000 of last week’s original 326,000 seasonally adjusted figure.
- Week ended April 6, 2013 — 356,935
That’s a pretty big upward revision to last week’s numbers.
For today’s prediction to end up accurate, raw claims will need to be 318,000 or below (318K divided by .993 is 320K, rounded). That should happen. If it doesn’t, we have a problem. To be worry-free, today’s the seasonally adjusted number really should come in at 300,000 or below (Update: AND stay there next week), which would mean that raw claims barely moved up from last week’s adjusted figure.
This is especially true because last week’s raw claims, after revision, were 7.6 percent higher than the previous week (all weeks involved are “clean” weeks involving no holidays). We really can’t afford to see them head up much further.
8:30 a.m.: DOL has announced 300,000 at its home page.
8:33 a.m.: The report is out (permanent link — DOL has gone to presenting these weekly reports in PDF format from here on out; also notice some additional verbiage, which may or may not be legitimate enhancements):
SEASONALLY ADJUSTED DATA
In the week ending April 5, the advance figure for seasonally adjusted initial claims was 300,000, a decrease of 32,000 from the previous week’s revised level. The last time initial claims were this low was May 12, 2007 when they were 297,000. The previous week’s level was revised up by 6,000 from 326,000 to 332,000. The 4-week moving average was 316,250, a decrease of 4,750 from the previous week’s revised average. The previous week’s average was revised up by 1,500 from 319,500 to 321,000.
There were no special factors impacting this week’s initial claims.
… UNADJUSTED DATA
The advance number of actual initial claims under state programs, unadjusted, totaled 298,393 in the week ending April 5, an increase of 3,531 (or 1.2 percent) from the previous week. The seasonal factors had expected an increase of 34,865 (or 11.8 percent) from the previous week. There were 356,935 initial claims in the comparable week in 2013.
“The seasonal factors had expected an increase of 34,865 (or 11.8 percent) from the previous week.” Excuse me, but what does THAT mean? (I intend to find out, just not immediately. Update: See below.)
A year-over-year comparison of raw claims is meaningless because last year’s comparable week was Easter Week.
While the press will sing hosannahs over the 300K seasonally adjusted number. The truth is that raw claims basically held steady (up by about 1.3%). That of course is better than seeing them zoom up. But given last week’s big upward revision, we really should see if today’s raw claims figure holds in next week’s report.
UPDATE: As to the comparative language (“lowest since May 2007″), let’s see if DOL continues to provide it when seasonally adjusted claims go up.
UDPATE 2: What the statement “The seasonal factors had expected an increase of 34,865 (or 11.8 percent) from the previous week” really means is “For seasonally adjusted claims to come the same as or better than last week, raw claims needed to be 329,727 or lower.”
294,862 (last week’s revised raw claims) plus the 34,865 just cited is 329,727 raw claims.
329,727 divided by .992 (this week’s seasonal adjustment factor) is 332,000 (last week’s revised seasonally adjusted claims, rounded).
Seasonal adjustment factors are abstract things which don’t “expect” anything.
If DOL is going to try to do something comparative to the prior week, my language is vastly better, but I’m not convinced that it’s worth it to even bother with the narrative. It’s giving the seasonal factors too much presumptive credit for somehow being precise. They’re anything but that.
It will also be interesting to see how this narrative changes during weeks when raw claims come in higher than the seasonal factors might supposedly indicate.