I can’t commit to a good / bad news headline this week. The Unemployment Insurance Weekly Claims Report has been released. Unfortunately, due to the auto industry revisions from the last two reports, it is difficult to decide whether the report represents good news or not. New claims came in at 554,000, which was a bit below the Bloomberg consensus of 560,000 (well within the consensus range of 535K to 590K). From the report:

In the week ending July 18, the advance figure for seasonally adjusted initial claims was 554,000, an increase of 30,000 from the previous week’s revised figure of 524,000. The 4-week moving average was 566,000, a decrease of 19,000 from the previous week’s revised average of 585,000.

The advance seasonally adjusted insured unemployment rate was 4.7 percent for the week ending July 11, unchanged from the prior week’s unrevised rate of 4.7 percent.

The advance number for seasonally adjusted insured unemployment during the week ending July 11 was 6,225,000, a decrease of 88,000 from the preceding week’s revised level of 6,313,000. The 4-week moving average was 6,541,500, a decrease of 132,500 from the preceding week’s revised average of 6,674,000.

It is still difficult to draw any conclusions from the seasonally adjusted data. A huge revision that simply wasn’t relevant this year just expired, so an increase was expected even if there was an improvement in the underlying trend. It will be a couple weeks before any underlying trend becomes apparent in the adjusted statistics again. Instead, we can turn to the unadjusted numbers. Back to the report:

The advance number of actual initial claims under state programs, unadjusted, totaled 580,944 in the week ending July 18, a decrease of 90,298 from the previous week. There were 411,408 initial claims in the comparable week in 2008.

The advance unadjusted insured unemployment rate was 4.7 percent during the week ending July 11, an increase of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 6,231,108, an increase of 57,168 from the preceding week. A year earlier, the rate was 2.4 percent and the volume was 3,164,970.

A decrease of 90,000 initial claims might be worth celebrating. An increase in the insured unemployment rate is not. That leaves this report a little mixed, but we should put a little more emphasis on the decrease in new claims, if only for the reason that the other statistic lags by one week.

Let’s look at the good / bad lists:

The good list (-1000 or more): MI, MA, NJ, IN, CA, IA

The bad list (+1000 or more): WV, ND, NV, LA, MD, TX, CO, OR, VA, AZ, WA, KS, AL, PA, AR, IL, SC, GA, TN, MO, FL, NC, NY

NY (the worst) was +12,504 vs MI (the best) at -6,648.

Ouch! The good/bad lists lag the new claims data by one week, and this list clearly shows that the only thing that shouldn’t have been in the seasonal adjustment last week was the auto industry. Michigan had a particularly good week while almost half of the US landed on the bad list. It looks like the construction and service industries are responsible for most of the bad list. Incidentally, “Return to a five day workweek” is listed in the comment section for Nevada, Colorado, and Virginia.

The decrease in the unadjusted numbers is too large to be ignored. Keep in mind that the good news is tempered by still being extremely poor on a year over year (or any historical) measure, and we don’t really know what the underlying trend is due to awkward statistics revisions from the last two week.