Thursday, January 21, 2010

Jobless Claims +36,000

From Bloomberg:

Distortions cloud what on the surface is a negative jobless claims report. Initial claims jumped 36,000 in the Jan. 16 week to 482,000, marking a third straight increase and the fifth increase in five weeks -- not a streak that points to improvement in the labor market (Jan. 9 week revised 2,000 higher to 446,000). The four-week average, at 448,250, rose 7,000 in the week to snap a long streak of uninterrupted improvement going back to August.

Now the special factors. The Labor Department said claims piled up due to short holiday staffing at state processing centers. Market News International is quoting a Labor Department analyst as saying the week's gain is "not economic, but administrative." Starting with the next report, the government analyst expects the effect to reverse making for a steady decline in coming weeks. An implication here is that short-staffing this year was greater than prior years and is not offset by seasonal adjustments. Note also that data from an unusually large number of seven states had to be estimated for the current report.

From CNBC:

The number of U.S. workers filing new applications for unemployment insurance unexpectedly rose last week as claims delayed from the year-end holidays were pushed through, government data showed on Thursday.

In essence, the previous weeks numbers should have been higher, but were not because applications were delayed for various reasons. We'll have to see how that dynamic plays out in the next few weeks.

The 4-week moving average posted in increase, but this was the first one in 19 weeks. In other words, this increase is against the prevailed trend of claims.