July 24, 2014

Initial Unemployment Claims (072414): 284K; Raw Claims Come in Under 300K

Filed under: Economy,Taxes & Government — Tom @ 7:06 am

Prediction: Well, a sort-of prediction — Bloomberg News says that “U.S. economic data today will show new home sales fell in June, while a weekly report on initial claims for unemployment insurance will say applications rose.”

Last week came in with 302,000 seasonally adjusted claims.

Update: Business Insider has a 307K prediction.

Seasonal adjustment factors:

  • Week ended July 19, 2014 — 99.2
  • Week ended July 20, 2013 — 103.0

Raw claims:

  • Week ended July 12, 2014 — (before revision)
  • Week ended July 20, 2013 — 340,457

It looks as if this week’s seasonal factor will make today’s result look better than it should by about 11,000 or 12,000 claims. Both weeks above were full five-day, mid-July business weeks, and there doesn’t seem to be a good reason for the differential between the years’ seasonal factors, and last year’s seasonally adjusted results were consistent with other weeks in July.

For a repeat of or improvement upon last week’s performance, raw claims will need to be 311,000 or lower (311K divided by 1.03 is 302K, rounded).

But, consisted with what was just noted above, raw claims really need to come in at or below 300K.

We’ll see here at 8:30.

HERE IT IS:

 SEASONALLY ADJUSTED DATA 

In the week ending July 19, the advance figure for seasonally adjusted initial claims was 284,000, a decrease of 19,000 from the previous week’s revised level. This is the lowest level for initial claims since February 18, 2006 when they were 283,000. The previous week’s level was revised up by 1,000 from 302,000 to 303,000. The 4-week moving average was 302,000, a decrease of 7,250 from the previous week’s revised average. This is the lowest level for this average since May 19, 2007 when it was 302,000. The previous week’s average was revised up by 250 from 309,000 to 309,250.

UNADJUSTED DATA 

The advance number of actual initial claims under state programs, unadjusted, totaled 292,344 in the week ending July 19, a decrease of 78,215 (or -21.1 percent) from the previous week. The seasonal factors had expected a decrease of 58,477 (or -15.8 percent) from the previous week. There were 340,457 initial claims in the comparable week in 2013.

This is a good result — just not as good as the reported seasonally adjusted 284K number would indicate. It’s really the equivalent of about 295K.

___________________________________

UPDATE: Regarding the seasonal factors

“Initial jobless claims probably remained near the 300,000 mark as seasonal factors likely continued to misestimate actual claims activity during the July auto factory shutdown season,” said Citi’s Peter D’Antonio.

“We posit that filing have been artificially low, relative to the May-June average, reflecting in part the inability of the seasonal factors to account for two post-crisis trends in the auto sector: (1) the auto sector is much smaller, resulting in fewer hourly worker claims than before; and (2) many factories stay open in order to accommodate stronger demand. Separately, beneficiaries and the insured rate likely also remained low due to factory retooling period seasonal factor idiosyncrasies.”

Mr. D’Antonio’s argument would support this year’s seasonal factor being lower than last year. Instead, this week’s factor, as noted above, was higher than last year’s comparable week.

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1 Comment

  1. These stats are meaningless drivel that obfuscate reality, the only important stat is the total number of full time employed people and the man-hours worked and paid for by employers employers. Only when an apples to apples comparison can be made with numbers that actually delineate the full from the part timers are such stats meaningful. A layoff of a full time Auto worker is more significant than someone getting off unemployment stuck in a part time job.

    Comment by dscott — July 24, 2014 @ 6:18 pm

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