The Unemployment Insurance Weekly Claims Report had better numbers than were anticipated with the initial claims coming in at 565,000 (Bloomberg consensus was 610,000). The previous week was revised up 3,000 to 617,000, but the decrease of 52,000 is welcome news. As you might expect, this isn’t the whole story. Reuters provides the explanation in U.S. jobless claims drop steeply

The number of U.S. workers filing new claims for jobless benefits fell sharply last week but the decline was amplified by seasonal adjustments mainly connected with fewer-than-expected layoffs in the automotive sector, the Labor Department said on Thursday.

The seasonal adjustments expect more layoffs due to auto manufacturers idling their plants in the summer. Because of difficulty in that industry, the plants were idled (some shut down for good) earlier this year. What’s more, continuing claims is setting records again at 6,883,000, an increase of 159,000. This number only highlights the lack of jobs. Remember that the statistic is under-reporting the problem (and has been for three weeks) because benefits are expiring for many more people than usual.

The adjusted data is still the number to look at for trend data, but the unadjusted data is the data that corresponds to actual people (also, it better reflects the strain on state programs). The news is bad. From the actual report:

The advance number of actual initial claims under state programs, unadjusted, totaled 577,506 in the week ending July 4, an increase of 17,612 from the previous week. There were 401,672 initial claims in the comparable week in 2008.

The advance unadjusted insured unemployment rate was 4.5 percent during the week ending June 27, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 6,043,561, a decrease of 34,892 from the preceding week. A year earlier, the rate was 2.1 percent and the volume was 2,857,438.

It looks like all of the good news was generated by the seasonal adjustment. Let’s look at the good / bad lists this week.

The good list (-1000 or more): FL, IL, PA, CA, TN, OR, MD, GA, LA, WI

The bad list (+1000 or more): CT, NC, NY, KY, KS, MA, NJ

NJ (the worst) was +7,876 vs FL (the best) at -12,493.

California is displaying a bit of volatility after last week. New Jersey is simply falling apart (some of it is seasonal, school closings related). The manufacturing industry is a significant source of layoffs, repeated multiple times in the excuses column of the report.

All things considered, a rather poor report.