Now that first quarter looks almost certain to go into contraction, the importance of salvaging a decent second quarter becomes more paramount. Trends in initial unemployment claims won’t necessarily point to a big pickup, but deterioration may point towards continued malaise (or conceivably worse).
Seasonal adjustment factors:
- Week ended May 10, 2014 — 90.9
- Week ended May 11, 2013 — 90.1
- Week ended May 3, 2014 — 286,916 (before likely revision)
- Week ended May 11, 2013 — 320,253
For the seasonally adjusted figure to come in as good as or better than predictions, raw claims will need to be 291,000 or lower (291K times .909 is 320K, rounded), or barely above last week’s raw claims before adjustment. That seems doable. Any rise in raw claims above 300K or so might be cause for raised eyebrows, but not concern. The concern threshold is probably 320K in raw claims.
We’ll get the news here (PDF) at 8:30.
HERE IT IS:
SEASONALLY ADJUSTED DATA
In the week ending May 10, the advance figure for seasonally adjusted initial claims was 297,000, a decrease of 24,000 from the previous week’s revised level. This is the lowest level for initial claims since May 12, 2007 when they were 297,000. The previous week’s level was revised up by 2,000 from 319,000 to 321,000. The 4-week moving average was 323,250, a decrease of 2,000 from the previous week’s revised average. The previous week’s average was revised up by 500 from 324,750 to 325,250.
… UNADJUSTED DATA
The advance number of actual initial claims under state programs, unadjusted, totaled 269,689 in the week ending May 10, a decrease of 19,059 (or -6.6 percent) from the previous week. The seasonal factors had expected an increase of 2,887 (or 1.0 percent) from the previous week. There were 320,253 initial claims in the comparable week in 2013.
That’s a pretty strong result, especially in the raw claims department. The cynical possibility is that employers are generally satisfied with the workers they have, are working them hard, and aren’t letting people go. The more likely possibility is that the employment situation at many companies is stabilizing or improving, and that they are hiring and not in a position to have to let people go.
We’ll see if this holds in subsequent weeks.
UPDATE: On the less than cheerful side, BLS reported today that Real Hourly Earnings declined by 0.3% in April. Additionally, earlier this month BLS said that 1st quarter 2014 productivity fell by an annualized 1.7%.
It’s too early to definitively state this, but it’s starting to look like it’s taking more workers to produce the same amount of output (given flat GDP), and that there’s no money for pay increases. (I’m personally aware of quite a few people suffering pay decreases.)
UPDATE 2: The Eurozone grew by just 0.2% (an annualized 0.8%, to make it comparable to how the U.S. does things) in the first quarter — and from what I can tell, they’re not blaming it on the weather. Everyone but Germany was flat or worse.