Notes on the Seasonal in Unemployment...
Ever since the mid-1970s the largest spikes in non-seasonally adjusted unemployment in July and January have been getting smaller. Since the Labor Department's seasonal adjustment procedure looks backward to estimate the seasonal, it doesn't capture this--and so will tend to "expect" a larger seasonal each January and July than we, who can see this trend toward shrinkage, do.
More important, however, in the past two years has been California's administrative processing backlog: a lot of unemployment claims filed in the first two weeks in January are processed during the last two weeks, and the Labor Department's seasonal adjustment does not pick up this two-year California-specific administrative problem...