As a backdrop for tomorrow’s big employment report, today’s seasonally adjusted initial claims figures came in at 324K, a decrease of 5.3 percent over the prior week. Last week’s figure was down 3.7 percent over the April 13th initial claims count.
Seasonal initial claims data
The seasonally adjusted data can sometimes get the adjustments wrong, but it doesn’t appear to be the case this time, with the non-seasonally adjusted figures (the actual figures) coming in lower than anticipated as well (below).
The question is: is there something to the initial claims figures over the prior two weeks, or is it real that the downward trend is still there? And, as a side note, where are the anti-sequestration advocates? How can they say the sequestration is hurting the economy with such initial claims figures? Wouldn’t you like to hear their excuses (although, we all know the excuses will revolve around the noisiness of the initial claims figures)?
To answer the question regarding whether the past couple weeks of data are more likely statistical noise or a reversal of the short upward trend (i.e. shifting back towards the prior three year’s downward trend): take a look at this chart once more (below).
The black line is the prior two and the current trough to trough change in initial claims. The trend makes the case that we’re real close to bottoming out. The trend line also indicates that we’re unlikely to reach the same trough as we did in the prior recovery. Perhaps the economy will surprise and continue to improve. Based upon the initial claims figures, the odds, though, are not on the continued improvement side, at least not continued strong improvement There’s also a good deal of chance that weak improvement will be the norm overall, with initial claims hovering around bottom for a good while.
Overall, initial unemployment insurance claims came in at 324K, a decrease of 18K over the prior week, or a whopping 5.3 percent. The question is whether the last two weeks of data simply statistical noise in the inflection point story or whether today’s figures are indicative of continued labor market improvement.