When I first saw the headline number, I thought “Someone tell me that this is a consequence of the weather and not a sign that the labor market is starting to crumble again.” Spoiler: it’s the seasonal adjustment. The Unemployment Insurance Weekly Claims Report has been released. Initial claims grew to 496,000 while last week’s figure was revised up 1,000. This was was actually inside the Bloomberg consensus range of 445k to 500k. From the report:

In the week ending Feb. 20, the advance figure for seasonally adjusted initial claims was 496,000, an increase of 22,000 from the previous week’s revised figure of 474,000. The 4-week moving average was 473,750, an increase of 6,000 from the previous week’s revised average of 467,750.

The advance seasonally adjusted insured unemployment rate was 3.5 percent for the week ending Feb. 13, unchanged from the prior week’s unrevised rate of 3.5 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Feb. 13 was 4,617,000, an increase of 6,000 from the preceding week’s revised level of 4,611,000. The 4-week moving average was 4,600,750, an increase of 4,250 from the preceding week’s revised average of 4,596,500.

The good news is that 200% of the increase was due to the seasonal adjustment. Actual claims, those that correspond to actual people, fell by 25,767. I still trust the seasonal adjustment to establish trends, but I’m comfortable saying that a new trend hasn’t yet been established. There’s hope this bump will reverse, though there may actually be a contributing factor from the weather that persists. I will speculate that business lost in the retail sector from people staying home was not likely offset by new snowblower purchases. Back to the report:

The advance number of actual initial claims under state programs, unadjusted, totaled 452,468 in the week ending Feb. 20, a decrease of 25,767 from the previous week. There were 605,668 initial claims in the comparable week in 2009.

The advance unadjusted insured unemployment rate was 4.2 percent during the week ending Feb. 13, a decrease of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 5,527,142, a decrease of 70,546 from the preceding week. A year earlier, the rate was 4.6 percent and the volume was 6,108,398.

According to Bloomberg (sorry, no linkable source), “claims offices said heavy weather increased the number of claims in the week.” The seasonal adjustment is consistent with the adjustment from a year ago, so this is plausible. On the plus side, last year’s seasonally adjusted numbers rose/hovered for about 5 weeks before beginning a very clear and lasting trend down. At these levels, a repeat wouldn’t be terrible.

The good / bad lists look good.

The good list (-1000 or more): CA, IL, NY, TX, MO, IA, NJ, MA, GA, WI, MI, OH, LA

The bad list (+1000 or more): KY, PA, NC

NC (the worst) was +5,897 vs CA (the best) at -5,540. The big 4, construction, service, manufacturing, and trade, were well represented in the good list. Unfortunately, all but trade were also represented in the bad list. The data supports another couple weeks of good lists (this is based to the lag in the lists, not some predictive capabilities I wish I had).

In other news, COBRA benefit subsidies are part of a bill on the Senate floor. It’s a stopgap measure, but that’s always the case these days. I’m actually happy it’s being identified as such. The jobs bill (separate from the COBRA extension bill) will head back to the House. The bulk of that bill goes toward fixing potholes ($20 billion toward highways and mass transit).

When we account for factors such as the weather and the seasonal adjustment, this report wasn’t too bad. Next week’s report will give us a better idea of where the underlying trend is taking us. Next Friday will bring us February’s employment situation report.