One Swallow Does Not Make a Summer, But...
Atrios flags briefing.com's report on the slightly worrisome initial unemployment weekly claims seasonally adjusted number:
Highlights
- Initial claims surge 69K to 375K in the week of January 26.
- Continued claims rose 47K to 2.716 mln in the week of January 19.
Key Factors
- Poor seasonal adjustment helps explain the volatile January levels -- strong adjustment early in month but absent in this latest week.
- Pulls 4-week average back to 326K Should find a more accurate weekly level in the coming weeks.
- The 4-week average of continued claims fell for a second week (after thirteen weekly gains).
- Some increased clarity after the unbelievably low early year initial claims levels.
Big Picture
Seasonal adjustment provided some volatility early in the year as the over-adjustment for post holiday workers left a 300K level and under-adjustment (we hope) in the latest week left a surge to 375K. The 326K 4-week average provides a better read but may also be low given the 340Ks seen in December.... Claims provide a nearly real time read on layoffs and the labor market as the employment report reflects the broader combined read of layoffs and hiring. A 360+K level for the 4 week average has been consistent with recession -- 362K in 1990 and 373K in 2001....
Initial jobless claims measure the number of filings for state jobless benefits. This report provides a timely, but often misleading, indicator of the direction of the economy, with increases (decreases) in claims potential signalling slowing (accelerating) job growth. On a week-to-week basis, claims are quite volatile, and many analysts therefore track a four week moving average to get a better sense of the underlying trend. It typically takes a sustained move of at least 30K in claims to signal a meaningful change in job growth...
