So close. I know I said that because of the lack of hiring the celebration point for the new claims number should be dropped from 500k to 400k. The truth is that I would celebrate just a little when we drop below the 500k mark. I’ll also celebrate a little when the numbers improve year over year, even if we’re comparing to a time when the economy was hemorrhaging jobs. It is true, though, that the two biggest celebrations should be reserved for the weekly number coming in below 400k and the monthly number coming in positive (net job creation, now that’s worth celebrating). I suspect the two will be closely related.
This week’s Unemployment Insurance Weekly Claims Report has been released. Initial claims dropped to 502,000. This was toward the low end of the Bloomberg consensus range of 495k to 525k. Last week’s number was revised up 2,000 to 514,000. From the report:
In the week ending Nov. 7, the advance figure for seasonally adjusted initial claims was 502,000, a decrease of 12,000 from the previous week’s revised figure of 514,000. The 4-week moving average was 519,750, a decrease of 4,500 from the previous week’s revised average of 524,250.
The advance seasonally adjusted insured unemployment rate was 4.3 percent for the week ending Oct. 31, unchanged from the prior week’s unrevised rate of 4.4 percent.
The advance number for seasonally adjusted insured unemployment during the week ending Oct. 31 was 5,631,000, a decrease of 139,000 from the preceding week’s revised level of 5,770,000. The 4-week moving average was 5,790,750, a decrease of 100,750 from the preceding week’s revised average of 5,891,500.
The seasonally adjusted initial claims number is the important number for those tracking trends. The continuing claims number (insured unemployment number) hasn’t been very useful for either the adjusted or unadjusted version; the expiration of benefits is indistinguishable from new hires. The unadjusted initial claims number is also important because it tells us the number of actual people losing their jobs. This week, the number moved in the wrong direction:
The advance number of actual initial claims under state programs, unadjusted, totaled 529,446 in the week ending Nov. 7, an increase of 46,904 from the previous week. There were 539,787 initial claims in the comparable week in 2008.
The advance unadjusted insured unemployment rate was 3.8 percent during the week ending Oct. 31, an increase of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 4,944,307, an increase of 10,863 from the preceding week. A year earlier, the rate was 2.6 percent and the volume was 3,460,633.
We’re now back at the point where the seasonal adjustment makes the new claims number look better than reality. This should be kept in mind when looking at reports. However, this doesn’t diminish the value of the seasonally adjusted number for helping to identify turning points.
The good / bad lists are looking a little better this week, but this might be because CA jumped from one extreme to the other. We needed the breather.
The good list (-1000 or more): CA, FL, GA, NY, NC, SC, KS
The bad list (+1000 or more): PR, MI, IL, WI
WI (the worst) was +1,501 vs CA (the best) at -6,752. Construction and manufacturing are responsible for both the respite in the good states and the renewed bleeding in the bad states. Construction, manufacturing, trade, and service will likely remain the most volatile industries for a while. They also are responsible for a significant chunk of total employment.
There was big news last week. The unemployment benefits extension was signed into law. Extended benefits trumps anything in this report. In about 4 months, expiring benefits will probably be another headlining issue. Until then, there really isn’t an issue that dominates the short term outlook for the unemployed. The truth is that there’s unlikely to be a major source of jobs before then, so an engine for jobs growth remains the most significant issue for the long term.
